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LGT says ILS growth is about deploying capital to tail risks

LGT ILS Partners’ Hilary Paul argues traditional reinsurers still hold most global catastrophe exposure, so ILS can complement balance sheets by targeting extreme tail risk while avoiding added counterparty credit risk.

Reported · Written up by our desk · Reinsurance

LGT ILS Partners’ Hilary Paul told Artemis that expanding the insurance-linked securities, or ILS, market does not necessarily require moving beyond property catastrophe risk.

Paul said traditional reinsurers still hold the vast majority of global catastrophe exposure, and that directing capital market capacity toward extreme tail risks can complement traditional balance sheets without adding counterparty credit risk, according to the interview with Artemis.

Paul added that, despite industry challenges, attracting capital is not the problem, because investor interest in insurance risk has never been stronger.

Instead, she framed the core challenge as finding opportunities for the industry to absorb and deploy that capital, based on Artemis’ recap of her remarks.

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