Solvency II will boost insurance securitizations, Ceiops

New Solvency II capital requirements are likely to drive forward the insurance-linked securities (ILS) market, according to a report by insurance adviser to the European Commission Ceiops. The new directive, which is due to come into effect in October 2012, “is very likely to be a major development for the ILS market”, Ceiops said. ILS consist of catastrophe bonds and life bonds that spread the risk of losses to investors and capital markets outside the traditional insurance industry.