ILS investing, reinsurance trends & outlook, and COVID-19 impacts 

Niklaus Hilti, Chief Executive Officer and Chief Investment Officer of Credit Suisse Insurance Linked Strategies, gave an interview to Artemis1 about the current state of the insurance-linked securities (ILS) investment space and reinsurance market trends.

Hilti began by explaining that his team started closely monitoring the impact of the COVID-19 pandemic on ILS when alerted to it in January.

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An interview with Niklaus Hilti, Credit Suisse ILS, June 2020

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Getting more specific, Hilti detailed his team’s work on reviewing liquidity, as well as exploring opportunities to de-risk and establish hedges for both life and non-life.

Expressing hope that there will be limited loss of notional if the pandemic stays contained, he advised caution: “It’s far too early to say that this is over.”

Hilti further explained that, on the non-life side, the flight to liquidity recalled the events of 2008. He stressed that while the ILS segment has overall been somewhat less impacted than insurance and reinsurance, potential turbulence for the market as a whole may still lie ahead.

Regarding the outlook for ILS, Hilti stated that he expects “strong demand and very attractive returns going forward.” He also added that this pandemic will likely not only lead to a rethinking of the probability and extent of pandemic risks, but also that risk managers will start to look differently at certain peak risks and its correlation under such severe scenarios. Both can lead to great opportunities in both the life as well as non-life ILS markets in the near future.