Demand for mortality bonds offers chance to de-risk

Interest in sub-investment grade mortality bonds is rising, giving more insurers and reinsurers a chance to de-risk their balance sheets. But insurance-linked securities are still being underused, say experts

Investors have shown an increased willingness to invest in sub-investment grade mortality bonds over the past few years and that trend is accelerating. This presents an opportunity for insurers to further de-risk balance sheets as Solvency II becomes business as usual, removing more underwriting risk for a lower price than ever before. But is it realistic to expect a glut of first-time issuers of extreme mortality bonds in a market that has been dominated by only a few big names?

Those few big