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 .
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 carriers. While the trend has mostly affected the US property catastrophe reinsurance market, the funds were moving further along the value chain to the primary commercial property insurance space, 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.