Securities and Contracts
Two forms of Insurance Linked Investments:
Insurance Linked Securities and Financial Insurance Contracts
| Insurance Linked Securities (ILS) | Financial Insurance Contracts (FIC) | |
| Form | Fixed-income securities | Customised contract |
| Return | Collateral Yiel + Premium/Spread (typically 2% to 15%) |
Collateral Yield + Premium/Spread (typically 2% to 40%) |
| Term | 12 to 60 months | 6 to 18 months |
| Liquidity | Liquid, tradeable asset | Illiquid, non-tradeable asset |
| Payout | If there is an event and specific triggers are met, cat bond pays out | If there is an event and specific triggers are met, insurance seller pays out |
| Market Size | USD 14bn | USD 156bn |