A secondary market for ILS can only emerge once the broader
market fully embraces electronic platforms, according to Brad
Adderley.
Adderley argues the primary obstacle blocking the development of
a secondary market for ILS is habit.
"People need to get used to doing business electronically
– not just in the secondary market," he said.
"Everybody accepts there is too much frictional cost lost in
premiums, everybody knows the market needs to be more efficient.
The answer to that is to use electronic platforms, but people are
reluctant to be the first mover, they are waiting for others to
move first."
Adderley predicts that as more insurance business is conducted
on electronic platforms, the pace of change will accelerate as
electronification gathers momentum.
