ILS is no monster. The president of reinsurer Alleghany , Weston Hicks , has likened insurance - linked securities ( ILS ) to Frankenstein 's monster and questioned whether the company carries more risk because it is untested by " the big one " . In the company ’s annual letter to its stockholders , Hicks said ILS performed well after the 2008 financial crisis and hurricanes Katrina , Rita and Wilma , thanks to stability and low correlation . However , Hicks questioned the business model of aligning so closely with cedent clients and investors , and concluded he preferred the " alignment inherent in the traditional insurance and reinsurance company structure " .
The president of reinsurer Alleghany , Weston Hicks , has likened insurance - linked securities ( ILS ) to Frankenstein 's monster and questioned whether the company carries more risk because it is untested by " the big one " . In the company ’s annual letter to its stockholders , Hicks said ILS performed well after the 2008 financial crisis and hurricanes Katrina , Rita and Wilma , thanks to stability and low correlation . However , Hicks questioned the business model of aligning so closely with cedent clients and investors , and concluded he preferred the " alignment inherent in the traditional insurance and reinsurance company structure " .