Artemis Live - Insurance-linked securities (ILS), catastrophe bonds (cat bonds), reinsurance 104: Rate adequacy & claims inflation "the most critical question" - Niklaus Hilti, Credit Suisse ILS
Jun 21, 2022
45:22
Our latest Artemis Live interview from June 2022 is with Niklaus Hilti, Head of ILS at specialist investment manager Credit Suisse Insurance Linked Strategies.
Hilti joined us at a particularly busy and interesting time for the reinsurance, insurance-linked securities (ILS) and broader capital markets.
We discussed the macro-economic environment and how that plays into reinsurance and ILS market trends, as well as the catastrophe bond market, the mid-year 2022 reinsurance renewals, the state of Florida's property insurance market and the outlook for the rest of the year.
Hilti also explained how his firm, Credit Suisse Insurance Linked Strategies, has been working hard to deliver on its promises to investors, taking advantage of hardening reinsurance market conditions to reposition its portfolio and tighten up terms and conditions.
One topic of focus in this interview is the global inflationary environment and how inflation needs to be factored into reinsurance and ILS market pricing.
He explained, "If today a hurricane or earthquake event happens again, a historical one, it would be significantly more expensive than what is captured already in the most update model version.
"Then if you look at cat bonds, let's say a three year placement, you have to think as well, what's the claims inflation over the next three years.
"It's something which needs to be factored in and that raises the question of how adequate is the pricing, or how much did we really see a real, real increase of margin or premium with the latest premium increases. For us, that is the most critical question at the moment."
Hilti joined us at a particularly busy and interesting time for the reinsurance, insurance-linked securities (ILS) and broader capital markets.
We discussed the macro-economic environment and how that plays into reinsurance and ILS market trends, as well as the catastrophe bond market, the mid-year 2022 reinsurance renewals, the state of Florida's property insurance market and the outlook for the rest of the year.
Hilti also explained how his firm, Credit Suisse Insurance Linked Strategies, has been working hard to deliver on its promises to investors, taking advantage of hardening reinsurance market conditions to reposition its portfolio and tighten up terms and conditions.
One topic of focus in this interview is the global inflationary environment and how inflation needs to be factored into reinsurance and ILS market pricing.
He explained, "If today a hurricane or earthquake event happens again, a historical one, it would be significantly more expensive than what is captured already in the most update model version.
"Then if you look at cat bonds, let's say a three year placement, you have to think as well, what's the claims inflation over the next three years.
"It's something which needs to be factored in and that raises the question of how adequate is the pricing, or how much did we really see a real, real increase of margin or premium with the latest premium increases. For us, that is the most critical question at the moment."