Facing tightening credit spreads and thin equity premiums, asset owners are cautiously embracing ILS for their higher yields and diversification benefits, but allocations remain modest.
As institutional investors across Asia Pacific scour the globe for yield and diversification, insurance-linked securities are moving into the mainstream, offering returns that are uncorrelated with the whims of the stock market.
Hong Kong is positioning itself as a market leader for insurance-linked securities (ILS), leveraging its financial infrastructure, regulatory support and connectivity to Mainland China.
Taiping Reinsurance's issuance of Asia's first dual-perils, dual-triggers catastrophe bond represents not just a milestone transaction, but signals the dawn of a more sophisticated approach to disaster risk transfer in the region.