True Convergence: A Revolution For ILS Funds

Richard Sharp, Partner at Bedell Cristin, explains insurance-linked securities (ILS) and explores their origins, before Mark Helyar, Of Counsel, and a leading Guernsey legal practitioner in the ILS sector, reveals the 'Fund of One' concept he devised and has been working on with industry, investors and the island's regulator.

Insurers assume risk under the insurance policies they write in return for the premiums they receive. They manage that risk by diversifying over a large number of policies and the types of events they insure and also by re-insuring with other insurers. Insurance-linked securities (ILS) are one way in which insurers and reinsurers reduce risk by using financial instruments to securitise the risk and transfer it to investors in the capital markets.