After a historic catastrophe season in the second half of 2017, 2018 will see a "brutal battle" for insurance-linked securities market share, according to the latest quarterly ILS market update from Willis Towers Watson Securities.
While incumbent reinsurers and ILS investors try to maintain their positions and extract some rate increases, other ILS investors and reinsurers are trying to grow their risk positions, Willis wrote.
Non-life catastrophe bond capacity worth $1.3 billion was issued through five catastrophe bonds in the fourth quarter of 2017, compared to $2.1 billion issued through five bonds in the fourth quarter of 2016.
Non-life ILS issuance approached $10 billion in 2017, setting a record, Willis said. Total non-life ILS capital stood at $88 billion at year-end 2017, representing a year-over-year increase of 17% over the previous year's $75 billion despite the substantial loss activity in the second half of 2017.
Willis Towers Watson Securities is the investment banking business of Willis Towers Watson Plc.