Alternative capital a wet blanket on natural-catastrophe spark to harden property market

By Chad Hemenway on February 15, 2018

Alternative capital in the form of insurance-linked securities is here to stay, and its response to a record-setting year for natural-catastrophe losses has “fundamentally changed marketplace dynamics,” according to a property market update from Willis Towers Watson.

The broker said catastrophe-exposed properties with recent losses are facing rate hikes of 20-25 percent, and similar programs without losses are facing increases of 10-20 percent. Other non-catastrophe-exposed property programs can expect flat renewals or a slight increase of 5 percent.

However, the abundance of conventional and alternative capital rules the day. As a result, Willis Towers Watson said it does not expect current conditions to last more than a few quarters.

“We see no end in sight to ILS growth as a long-term trend,” Willis Towers Watson said in the report. While making a point to say the insurance industry will not be replaced by ILS, the broker conceded that “the industry has changed, and the changes are permanent.”


This story in an excerpt of the original. The content originally appeared in Professional Front Page News.
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Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or