NEW YORK — The rise of insurance-linked securities has had the effect of flattening the reinsurance-pricing cycle, and preventing rates from rising, according to a former reinsurance executive.
Speaking at Keefe, Bruyette & Woods' Insurance Conference held here, Don Kramer, now CEO of ILS Capital Management, noted that the aftermath of the 2011 catastrophe events shows the impact insurance-linked securities have had on the marketplace.
Last year was the second-costliest year for catastrophe losses. Kramer says, “You would think that we're getting rate increases. And the fact is that insurance-linked securities have actually leveled the market.”
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