{"id":388,"date":"2025-02-21T13:00:55","date_gmt":"2025-02-21T14:00:55","guid":{"rendered":"http:\/\/alteredconcept.com\/?p=388"},"modified":"2025-02-25T16:41:58","modified_gmt":"2025-02-25T16:41:58","slug":"increased-ils-capacity-to-support-innovation-in-2025-gallagher-res-vickers","status":"publish","type":"post","link":"http:\/\/alteredconcept.com\/index.php\/2025\/02\/21\/increased-ils-capacity-to-support-innovation-in-2025-gallagher-res-vickers\/","title":{"rendered":"Increased ILS capacity to support innovation in 2025: Gallagher Re\u2019s Vickers"},"content":{"rendered":"

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Speaking in a recent video interview with our sister publication Reinsurance News, James Vickers, Chairman of Gallagher Re\u2019s International division, suggested that the excess capacity coming into the insurance-linked securities (ILS) space will help to drive innovation and support the development of new lines of business.
\n<\/span>
\n\"james-vickers-gallagher-re-reinsurance-news-interview\"<\/a>Commenting on the record year for cat bond issuance in 2024<\/a>, Vickers highlighted a series of developments expected this year, including the effects of a new influx of capital.<\/p>\n

\u201cI think that the new capacity coming in will make it easier to innovate a bit in the ILS space. I mean, who would have thought there\u2019d be cyber bonds a couple of years ago? They are now building up some momentum. Casualty bonds are also beginning to appear,\u201d Vickers said.<\/p>\n

According to Vickers, the excess capacity coming in will help to drive innovation in these new lines, but the heart of the ILS market will remain property catastrophe.<\/p>\n

\u201cThe new lines of business coming in are extremely interesting, but they\u2019re not really moving the dial, well not at the moment anyway,\u201d Vickers added.<\/p>\n

Another point of interest in 2025 that the Gallagher Re executive highlighted<\/a> is the balance between investors putting their money into traditional cat bonds and those looking at a collateralised approach.<\/p>\n

\u201cThe spreads on cat bonds have narrowed, and as the pricing on some of these cat risks begins to fall away, the returns may drop a little bit,\u201d he said.<\/p>\n

Vickers continued, \u201cIf we go back to pre-2021\/2022, cat bond pricing had become fairly decoupled from the original pricing. It\u2019s now been completely in line with traditional pricing.<\/p>\n

\u201cHowever, if it drifts too far away, I think we might find investors preferring to move towards a collateralized approach, and perhaps offering traditional incumbent reinsurers collateralized quota shares and writing the business that way, rather than through a pure cat bond instrument.\u201d<\/p>\n

Watch the full video<\/a> to hear more from Gallagher Re\u2019s Vickers on the 1.1 2025 renewals, the property and casualty markets, the insurance-linked securities (ILS) sector, rising cat losses and more.<\/p>\n

The full video interview is embedded below.<\/p>\n