Guernsey Finance Chief Executive Dominic Wheatley
explains how Guernsey's financial services sector has remained
at the forefront of innovation in the past year and is utilising
its expertise across a variety of asset classes.
Recent events in the Caribbean have reminded us of the
destructive power of Mother Nature. Global warming is changing
traditional weather patterns, increasing the incidence of tropical
storms and increasing their ferocity. This is placing substantial
burdens on the wholesale reinsurance markets to meet the aggregate
claims that arise out of such events.
Insurance linked securities (ILS) are a means by which investors
can provide additional capital into the market against this risk,
providing investors with enhanced returns in today's low
interest environment. ILS also has a risk profile that is
non-coterminous with that of conventional financial assets,
facilitating improvements in the overall risk profile of
investors' portfolios.
