A celebration of cat bond market innovation: Artemis London 2022

Yesterday, close to 250 attendees joined us for our first insurance-linked securities (ILS) market conference held in London, enjoying insightful talks from our speakers and networking opportunities with ILS players, reinsurance executives and investors.

Given the strong turn-out, we’re delighted our first ILS conference in London, Artemis London 2022, was among the biggest ILS-specific events ever held in the city.

Attendees came from as far afield as New Zealand, Hawaii, Asia, North and South America, Bermuda, as well as a large European contingent, plus as you’d expect numerous London marketplace leaders in ILS and reinsurance.

While we only sold out this week, by the time the event began we already had a waiting list of over 40 additional people.

So we’re delighted with the demand for our first ever conference in London and look forward to making this a new annual Artemis ILS market conference and growing the event next year.

Themed as a celebration of the catastrophe bond, in the 25th year since landmark deal Georgetown Re, the agenda also treated attendees to thoughtful discussions about deeper ILS market conditions, ideas and innovation, the reinsurance and global macro environment, and investor appetite.

We’ll bring you much more coverage of the event over the coming weeks, with both audio and video recordings to be shared, for now though, as we decompress following the event and absorb its successes, we just wanted to highlight some thoughts from one of our keynote speakers, Michael Millette, Founder & Managing Partner, Hudson Structured Capital Management.

As one of the people responsible for helping to drive catastrophe bond market development in the early days of its emergence as a risk transfer option for insurance and reinsurance cover, Millette has been a foundational figure in the ILS market and shared a thoughtful keynote speech with the audience, discussing the past, present and future of cat bonds.

We’ll bring you Millette’s full speech in due course, but for now here’s a highlight of just a few of his comments.

“This anniversary celebration is important,” Millette told the assembled Artemis London audience.

Saying that, “The innovations in this bond market have contributed to the overall success of the catastrophe market expansion for over two decades.”

He continued to explain that the catastrophe bond has also delivered value back to the capital markets structures it came from.

Adding, “They’ve also contributed to the capital markets, you may or may not all realise that some of the early structures in credit derivatives took inspiration from the nascent catastrophe market.”

Millette continued, “It’s important to have this conference now and to commemorate 25 years because the cat market, the cat bond market, and the broader reinsurance market, are all wrestling with and reconsidering some aspects of their structure in light of the difficult experience of the last five years.

“So, it’s a good time to take stock.”

He explained the history of the cat bond market and detailed some of the challenges of more recent years.

But Millette remains constructive on future growth of the use of cat bonds and other ILS as risk transfer and investment instruments.

“The sector will revive because all parties within the sector need it to grow. The reinsurance industry needs more capacity, insurance buyers need more coverage and investors need more diversification,” he said.

Later during his speech, explaining why ILS capital could become increasingly important and he expects additional cat bond market growth, Millette said, “The world is becoming more catastrophic, because cat risk appears to be drifting to higher-levels due to climate change. It will be covered in some fashion and the price level will respond to meet that need.

“In some cases, there’ll be more government support to take the edge off, but the 2017 to 2020 dynamic of capital expanding faster than risk is over and we should expect to see price and terms now meet the challenge of clearing the market.”

While it is time for a celebration of the foundational first 25 or so years of catastrophe bonds, Millette said more important is meeting to discuss the future and said, “We are here to kick off a reconsideration to drive another quarter century of growth.”

We’ll publish the full speech from Millette in the coming days, while video and audio podcast versions of every session of the Artemis London 2022 conference will be available in a few weeks time.

For now, we’d like to thank all of our speakers and sponsors and hope to see even more attendees next year.

Thank you to all of our kind sponsors for the day, who you can see details of below: