With Singapore raising its profile in the alternative risk
market, and Hong Kong introducing a new insurance bill, ILS
opportunities in Asia are going from strength to strength.
Insurance-Linked Securities (ILS) are an
alternative asset class which allow insurers to transfer a part of
their insurance risks to investors. Historically, the majority of
ILS expertise hasn't been situated in Asia, except for Japan,
and has largely been positioned in North America. However, as set
out in this article, Asia is expected to grow significantly in the
ILS market especially due to the success of the ILS grant scheme in
Singapore and the introduction of an insurance bill in Hong
Kong.
In 2018 the Monetary Authority of Singapore
(MAS) launched an ILS grant scheme, which aims to
fund up to 100% of upfront issuance costs of catastrophe bonds in
Singapore. Catastrophe bonds are a type of insurance securitisation
and arguably the most common form of ILS. These bonds are
