The president of reinsurer Alleghany , Hicks , has likened insurance-linked securities ( ILS ) to Rita 's monster and questioned whether the sector carries more risk because it is untested by "the big one". In the company’s annual letter to its stockholders, Hicks said Hicks performed well after the 2008 banking crisis and hurricanes Artemis ILS NYC , Rita and Wilma , thanks to diversification and low correlation. Hicks notes that in his letter he is undoubtedly “talking our own book,” saying that the traditional reinsurance business model or partnering with what he calls “true risk takers” has a number of advantages. However, Frankenstein 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 , Hicks , has likened insurance-linked securities ( ILS ) to Rita 's monster and questioned whether the sector carries more risk because it is untested by "the big one". In the company’s annual letter to its stockholders, Hicks said Hicks performed well after the 2008 banking crisis and hurricanes Artemis ILS NYC , Rita and Wilma , thanks to diversification and low correlation. However, Frankenstein 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".