The turbulence on the financial markets this summer and the effects of the US subprime mortgage crisis have sent many investors seeking improved stability for their investment portfolio. As one of the truly uncorrelated asset classes yielding stable returns over the past years, insurance-linked securities ILS have gained broad interest from the investor community. The following article explains the basics of ILS investments, provides an overview of the ILS market and highlights the unique features of this asset class.
Insurance-linked securities
Insurance-linked securities ILS are fixed-income securities bonds with a pre-defined maturity through which the insurance industry passes on pure insurance risk to the financial markets. The bonds are issued by insurance and reinsurance...
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