According to King Ridge Capital Advisors LLC, casualty ILS is gaining traction with investors familiar with private credit structures, offering diversification away from credit-linked risks.
Global investors have committed more than $1.6 trillion to private credit and even larger sums to private equity, both of which ultimately rest on the same foundation of corporate credit risk.
This expansion has fueled crowding, compressed returns, and contributed to a broader credit bloat, leaving portfolios increasingly tied to borrower default dynamics that worsen during recessions and liquidity stress.
Author's summary: Casualty ILS offers diversification from credit risk.