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  - WN.COM - Business - 28/Jul 09:18

How insurance-linked securities provide diversification for investors

Providing exposure to natural catastrophe risk such as earthquakes and hurricanes, the performance of insurance-linked securities (ILS) is effectively uncorrelated to that of broader capital markets – and is therefore unaffected by market, economic, or geopolitical volatility. A financial market crisis cannot cause an earthquake or a hurricane. As a result, the asset class is seeing increased interest from investors seeking diversification and an alternative source of income and returns. Furthermore, since September 2022, when Hurricane Ian hit Florida in the USA, the ILS market recovered very quickly from the impact of that storm and saw record returns in 2023 and 2024, driven by high...

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