Insurance - linked securities ( ILS ) funds , which are predominantly used to backstop mainstream insurers , are funnelling money into the primary coverage market , helping to suppress earnings for traditional insurance . While the trend has mostly targeted the US property catastrophe reinsurance market , the funds were moving further along the supply chain to the primary commercial life insurance market , according to a study by ratings agency Standard & Poor 's ( S&P ) . “Their presence has had the most acute impact in the U.S. property catastrophe reinsurance market, but is starting to flow into the U.S. primary commercial property markets as well,” S&P said, adding that new money entering the re/insurance market combined with a “relatively benign loss environment” will only add to pricing pressure. The presence of ILS in the market is likely to stimulate competition and further force down rates , S&P said .
Insurance - linked securities ( ILS ) funds , which are predominantly used to backstop mainstream insurers , are funnelling money into the primary coverage market , helping to suppress earnings for traditional insurance . While the trend has mostly targeted the US property catastrophe reinsurance market , the funds were moving further along the supply chain to the primary commercial life insurance market , according to a study by ratings agency Standard & Poor 's ( S&P ) . The presence of ILS in the market is likely to stimulate competition and further force down rates , S&P said .