{
  "id": "term-insurance-linked-securities",
  "type": "term",
  "languages": {
    "en": {
      "id": "term-insurance-linked-securities",
      "lang": "en",
      "type": "term",
      "title": "Insurance-Linked Securities (ILS)",
      "shortDefinition": "Insurance-linked securities are securitized risk transfer instruments that transfer insurance risk – particularly natural catastrophe risk – directly to capital market investors, bypassing the traditional reinsurance market.",
      "synonyms": [
        "ILS",
        "Alternative Risk Transfer"
      ],
      "linesOfBusiness": [
        "Property",
        "All lines"
      ],
      "jurisdictions": [],
      "tags": [
        "Reinsurance",
        "Capital Markets"
      ],
      "relations": {
        "relatedTerms": [
          "term-hartmarkt-weichmarkt"
        ],
        "partOf": [],
        "appliesTo": [],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
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        "complementedBy": []
      },
      "attribute": null,
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      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-08-31",
      "generated": {
        "by": "process:reconstructed",
        "at": "2026-08-31T00:00:00.000Z"
      },
      "verified": [
        {
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      "url": "https://hgh.ch/lexikon/en/knowledge/term/insurance-linked-securities/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/begriff/insurance-linked-securities/",
      "body": "## Concept\n\nInsurance-linked securities (ILS) are financial instruments whose repayment or coupon is linked to the occurrence of a defined insurance event (e.g., a natural catastrophe of a certain intensity). They allow insurers and reinsurers to transfer risk directly to capital market investors, thereby accessing alternative capacity outside the traditional (re)insurance market.\n\n## Catastrophe Bonds as the Primary Form\n\nThe best-known form of ILS is the catastrophe bond (cat bond), under which investors, in exchange for an attractive coupon, accept the risk of a total loss of their invested capital should the trigger event defined in the bond occur. Other forms include sidecars, industry loss warranties (ILW), and collateralized reinsurance.\n\n## Relevance for the Reinsurance Market\n\nILS capital has become a firm complement to traditional reinsurance capacity, particularly for peak natural catastrophe risks; the availability of ILS capital has a dampening effect on the price swings of the classic hard market/soft market cycle, since institutional investors, unlike traditional reinsurers, generally view insurance risk primarily as uncorrelated diversification within a broader investment portfolio."
    },
    "de": {
      "id": "term-insurance-linked-securities",
      "lang": "de",
      "type": "term",
      "title": "Insurance-Linked Securities (ILS)",
      "shortDefinition": "Insurance-Linked Securities sind verbriefte Risikotransferinstrumente, die Versicherungsrisiken – insbesondere Naturkatastrophenrisiken – direkt an Kapitalmarktinvestoren übertragen, ohne den traditionellen Rückversicherungsmarkt zu durchlaufen.",
      "synonyms": [
        "ILS",
        "Alternative Risk Transfer"
      ],
      "linesOfBusiness": [
        "Property",
        "All lines"
      ],
      "jurisdictions": [],
      "tags": [
        "Rückversicherung",
        "Kapitalmarkt"
      ],
      "relations": {
        "relatedTerms": [
          "term-hartmarkt-weichmarkt"
        ],
        "partOf": [],
        "appliesTo": [],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": null,
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-08-31",
      "generated": {
        "by": "process:reconstructed",
        "at": "2026-08-31T00:00:00.000Z"
      },
      "verified": [
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          "at": "2026-09-04T00:00:00.000Z",
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      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/begriff/insurance-linked-securities/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/term/insurance-linked-securities/",
      "body": "## Begriff\n\nInsurance-Linked Securities (ILS) sind Finanzinstrumente, deren Rückzahlung oder Verzinsung an den Eintritt eines definierten versicherungstechnischen Ereignisses (z. B. eine Naturkatastrophe bestimmter Intensität) gekoppelt ist. Sie ermöglichen es Versicherern und Rückversicherern, Risiken direkt an Kapitalmarktinvestoren zu übertragen, und erschliessen damit alternative Kapazität ausserhalb des traditionellen (Rück-)Versicherungsmarkts.\n\n## Cat Bonds als wichtigste Ausprägung\n\nDie bekannteste Form der ILS sind Katastrophenanleihen (Cat Bonds), bei denen Investoren im Austausch für eine attraktive Verzinsung das Risiko eines Totalverlusts ihres eingesetzten Kapitals übernehmen, falls das im Bond definierte Auslöseereignis (Trigger) eintritt. Weitere Ausprägungen sind Sidecars, Industry Loss Warranties (ILW) und Collateralized Reinsurance.\n\n## Bedeutung für den Rückversicherungsmarkt\n\nILS-Kapital hat sich zu einer festen Ergänzung der traditionellen Rückversicherungskapazität entwickelt, insbesondere für Spitzenrisiken im Bereich Naturkatastrophen; die Verfügbarkeit von ILS-Kapital wirkt dämpfend auf die Preisausschläge des klassischen Hartmarkt-/Weichmarkt-Zyklus, da institutionelle Investoren – anders als traditionelle Rückversicherer – Versicherungsrisiken primär als unkorrelierte Diversifikation innerhalb eines breiteren Anlageportfolios betrachten."
    }
  }
}