Insurance-Linked Securities (ILS)

Insurance-Linked Securities (ILS)

Insurance-linked securities (ILS) is another form of reinsurance for insurers who are eager to transfer risk and tap new sources of capital market funding. 

Traditionally, those financial instruments are used as a cover for property losses due to the natural catastrophes. Performance of ILS is driven by natural and weather- linked events, not correlated with the corporate behaviour factors.

How does ILS work?
The collateral for ILS is provided by capital market investors, these investors purchase debt or equity issued by the ILS vehicle and receive a coupon for this investment. 

Their capital is committed for the duration of the risk period and the cash paid for an ILS is not directly exposed to the credit risk of the issuer, as it is held separately in a trust account and invested in money market funds or instruments. In this structure, the insurance-linked instrument is not exposed to the issuer’s ability to pay claims.

Turker Re is aiming to cement a role for itself in helping the Turkey, MENA and Eastern Europe regions access the capital markets and insurance-linked securities (ILS) investors for reinsurance capacity therefore it has launched a Turker Capital Solutions division.

Our Capital Solution team provide full insurance management, risk modelling, consulting and integration ILS-backed capacity into their customer’s reinsurance and insurance programs. And also, they give an ILS services to both, protection buyers and investors.