Swiss Re says new EU rules would boost reinsurance and ILS demand.
Global Banking News - 12 August 2010(c)2005 - Electronic News Publishing - http://www.enpublishing.co.uk
Swiss Re (RUKN.VX) has said that new rules in the region aimed at boosting insurers' financial strength would encourage more issues of securities tied to natural disasters and peak mortality risks.
According to the company, Solvency II capital regulations that are to come into effect in 2013 would support insurance-linked securities (ILS) and would positively affect more mature ILS products such as catastrophe bonds.
Alison McKie, managing director in Swiss Re's life and health area, said, 'Securitisation is an effective way of managing these peak risks and reducing capital requirements. Overall, we therefore expect the new regulations to lead to an increase in the use of alternative risk transfer products, in particular by those companies who are using internal models to assess their capital position.'
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