An ILS portfolio manager’s key responsibility is to assess individual reinsurance/ILS transactions, including the determination of payout probability, the negotiation of the appropriate premium to assume this risk on behalf of a fund/portfolio, and ultimately the agreement on the contractual terms and conditions that align with interests of both parties – the reinsurance buyer and the capacity supplier/ILS fund. Effective reinsurance underwriting strikes a balance between efficient risk mitigation for the primary insurer and the profitability of the reinsurer.

In addition to risk assessment and pricing, reinsurance underwriters and ILS managers need to focus on managing the overall portfolio of individual transactions by maintaining a balanced portfolio strategy to manage downside risk and maximize returns. Finally, the underwriter supports each transaction during the lifecycle of the deal – from inception to expiration.