PE moves into reinsurance via AI-linked securities
Private equity and capital providers are expanding into reinsurance through AI-linked securities that slice risk/return using AI-modelled exposures — this shifts alternative capital into reinsurance and raises transparency demands for underwriters (artemis.bm).
EY flagged a “latent market demand” for private equity and alternative capital to enter reinsurance via AI-linked securities that tranche risk using AI-modelled exposures. (artemis.bm) An EY executive said two‑thirds of large insurers and reinsurers are actively developing AI use cases, citing underwriting, claims and fraud-detection as leading deployments. (theinsurer.com) Aon reported total alternative capital for ILS at about $121 billion and said catastrophe bond issuance surpassed $21 billion in the most active 12‑month period on record. (aon.mediaroom.com) Artemis’ market data noted full‑year 2024 catastrophe bond issuance reached a record $17.7 billion across 93 transactions, underscoring rising investor appetite for insurance risk. (royalgazette.com) Industry projections cited at the Bermuda Risk Summit put reinsurance capacity entering 2026 at roughly US$540 billion of traditional capital and US$120 billion of ILS capital. (insurancebusinessmag.com) Milliman’s analysis warned that expanding ILS structures and private capital exposure demand substantial modelling expertise from sponsors and cedants in the absence of liquid secondary markets. (milliman.com) EY’s guidance recommends insurers modernize operating models, data pipelines and GenAI applications to support AI‑driven pricing and model transparency required by new capital providers. (ey.com) Artemis’ ILS NYC 2025 conference registered more than 425 attendees, reflecting concentrated industry engagement where AI‑linked structures and alternative capital strategies are being debated. (youtube.com)
