Market-leading Bermuda remains the natural location for the growth and development of the insurance-linked securities asset class, the chief executive of the Bermuda Stock Exchange says.

Greg Wojciechowski was speaking at Monte Carlo Reinsurance Rendez-Vous de Septembre, the annual conference of reinsurers.

Mr Wojciechowski said the ILS market had changed substantially in the decade he has been travelling to the conference, moving from an unwelcome participant in the market to playing a significant role. ILS rose to prominence as an asset class, he said, partly because investors were searching a decade ago for promised returns.

“There are not many asset classes that develop with the attributes that ILS has for investors,” he told Monte Carlo Today, a special edition published by Intelligent Insurer.

“Ten years ago, ILS was an unwanted visitor. People were asking ‘is the capital sticky, is it really good for the market’.

“The market has been tested several times, probably most aggressively over the past couple of years.

“Some no longer call it alternative capital, but rather partnership capital, to the extent that traditional models have really blended.”

Interest in ILS remains strong, Mr Wojciechowski said.

“When you look around the world at some of the global economic developments, the financial markets are lacklustre,” he said. “You’re seeing things such as inverted yield curves and negative interest rates.

“Even though ILS has some structural issues that I think are going to be worked through, there is still a yield out there in an ILS asset.

“I’m bullish about Bermuda and its place in the ILS market, as it can benefit from its combination of entrepreneurship in ILS, but also its prudence.”