Insurance-linked securities (ILS) will be here to stay if Lloyd’s managing agents get their way.

About 80% of managing agents who responded to a Lloyd’s Market Association (LMA) survey want ILS products to be “a permanent fixture in the (re)insurance market”.

The survey polled senior executives from 25 managing agencies.

More than two-thirds see a potential use for the new UK ILS framework in the next year and 60% want to see Lloyd’s Central Fund diversify its sources of capital through ILS.

All respondents believe ILS transactions will widen to cover more risks, including cyber and legacy business, in the next three years. 

About 88% want to see London leverage its underwriting expertise to gain access to uninsured risks using ILS capital, while 36% believe Lloyd’s framework will need to change to accommodate more use of ILS.

“This research shows market participants are extremely supportive of increasing the use of ILS generally, and doing so at Lloyd’s in particular,” LMA Director of Finance and Risk Ken Curtis said.

“The new UK framework has already been tested by a Lloyd’s syndicate, and the market will explore ways to make future transactions even simpler and more efficient.”