One of the biggest challenges to providing fully environmental, social and governance (ESG) aligned investment strategies in the insurance-linked securities (ILS) market is the inability to know what really lies beneath every transaction, in terms of what has been underwritten by cedents along the market chain.
As an ILS investment fund manager, or direct ILS investor, allocates capital to securities or reinsurance transactions, the lack of transparency in the insurance-to-risk capital market chain makes it near impossible to be able to say with confidence that every beneficiary of a pay-out is also fully-aligned with ESG practices and ways of thinking.
