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If You Can't Beat Them, Join Them: Reinsurers Turn to Capital Markets to Adapt

Reinsurers are adapting to the threat posed by alternative capital by expanding their presence in the capital markets themselves, especially with sidecars and insurance-linked securities, according to two recent reports.

By Phil Gusman | Updated on September 04, 2013

Reinsurers are adapting to the threat posed by alternative capital by expanding their presence in the capital markets themselves, especially with sidecars and insurance-linked securities, according to two recent reports.

In its “Global Reinsurance Outlook,” Moody’s Investors Service outlines the new reality for reinsurers, stating, “Capital markets convergence has finally arrived in the reinsurance market. What began with a trickle of capacity more than 15 years ago has turned into a flood of capital entering the reinsurance market from institutional investors in the form of catastrophe bonds, collateralized reinsurance vehicles and industry loss warranty contracts.”

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