A new working group will support the push to establish London as a hub for insurance-linked securities (ILS), also known as catastrophe bonds.

The London Market Group (LMG) will provide “practitioner input”, Head of LMG Secretariat Christopher Croft says.

“We are interested in this work because London, as the centre of excellence for global specialty reinsurance business, should lead the world in terms of innovation of new products,” he told insuranceNEWS.com.au.

“ILS is very much at the innovative end of our industry and we are keen to ensure the expertise that drives this is part of the London market cluster.”

In March the British Government announced plans to develop a corporate and taxation structure to attract ILS business to the country.

The Government wants a competitive structure allowing ILS to be domiciled in the country, to bolster the UK’s position as a “world leader in the global insurance market”.

Bermuda dominates the ILS market, accounting for 80% of last year’s global issuance, worth $US8.8 billion ($11.5 billion).

About $US25 billion ($32.6 billion) of ILS are currently on issue, with 60% issued from Bermuda, followed by the Cayman Islands with 30% and Ireland with 10%.