Mayer Brown on ESG and insurance linked securities
he insurance-linked securities (ILS) sector continues to mature and as it does so new opportunities are presenting themselves, which senior Partners from global law firm Mayer Brown believe could help to stimulate continued market growth in ILS.
In the next in our series of sponsor showcase video interviews for the upcoming Artemis ILS NYC 2022 conference (held April 22nd in New York City), we welcomed speakers from one of our Associate sponsors for the conference, global law-firm Mayer Brown.
Joining us for this conversation were Steve Rooney, Partner and Co-leader of Mayer Brown’s Global Insurance Industry Group, as well as Ricky Spitzer and Colin Scgall, both Partners in the Global Insurance Industry Group of the law firm.
The trio highlighted some trends they are watching in insurance-linked securities (ILS), in terms of still converging reinsurance and capital market activities, as well as in certain structures such as catastrophe bonds and reinsurance sidecars.
Rooney explained that how the ILS market embraces environmental, social and governance (ESG) and adjusts its offering to meet global investor needs will be a key trend for the future.
“You’re starting to see more and more non-traditional companies get involved in this market. At times, I think the industry has been doing things a particular way for a very long-time, so when someone new comes in with new ideas it can be difficult for them to interact with the systems that are currently in place, because they assume a certain model of doing business. I think that can be challenging at times and it’ll be interesting to see how that involves,” Spitzer commented.
Finally, Scagell discussed a key example of innovation in the catastrophe bond market, the much-discussed Red Cross volcanic risk deal, saying that this could be a sign of a market growth opportunity in years’ to come.
“You’ve only got to look at the newspapers and think about the devastating impact of the Tongan earthquake and the resulting tsunami, then the potential for a repeat or upsize of that kind of bond offering, to really get the market excited and quench the appetite of investors ESG requirements and everything else in between,” Scagell explained.
“That’s a terrific example of the future direction. It’s not going to hold the market on its own, but it’s a great piece of evidence showing the maturity of the market and its ability to respond to the problems of the here and now.”