ILS Capital Management to expand into specialty reinsurance-linked investments

by Artemis on May 22, 2013

Bermuda based specialist insurance-linked securities and collateralized reinsurance investment manager ILS Capital Management, Ltd. has announced an expansion to its strategy as it intends to begin investing in specialty reinsurance contracts. ILS Capital Management aims to bring something new to investors in reinsurance and catastrophe risk, by including specialty reinsurance investments within its flagship fund, The 1609 Fund.

To assist in this expansion and new addition to its strategy, ILS Capital Management has announced two hires, both experienced specialty reinsurance focused executives. Subject to the approval of Bermuda immigration, Brian Gulbransen and William Mulcahy will be joining the firm effective 1st July 2013.

On the addition of specialty reinsurance contracts into its flagship fund, ILS Capital Management said that from the 1st October 2013, it will be investing in specialty reinsurance alongside its property catastrophe reinsurance investments. As well as adding specialty reinsurance to its flagship 1609 Fund ILS Capital will also offer managed accounts of specialty reinsurance investments to institutional investors.

It’s an interesting move as this new strategic offering could become an attractive diversifying investment opportunity for investors already allocating to ILS and reinsurance linked investments. It may also attract a different type of investor with different return targets and investment motivations or help to encourage new investors into the ILS space who have in the past been put off by the idea of investing in catastrophe risk.

Chairman and CEO of ILS Capital Don Kramer commented; “Specialty reinsurance was a significant contributor to my previous companies’ success, and I believe it will be a key contributor to our portfolio’s returns. I am excited to be able to offer specialty reinsurance to institutional investors and to work with Brian and William again. They are highly regarded insurance professionals that have a strong understanding of the specialty reinsurance market and I am pleased that they have decided to join us.”

Gulbransen will be the chief underwriter of specialty reinsurance at ILS Capital and a member of the firm’s investment committee. He will be responsible for managing ILS Capital’s specialty reinsurance investment portfolio. Before joining ILS Capital, Gulbransen served as chief underwriter of marine, energy and aerospace at Ariel Reinsurance Co. Ltd. Prior to that he was the chief underwriter of marine, energy and aerospace with White Mountains Underwriting Ltd. He also helped set up the Greenwich, CT; Dublin, Ireland and Bermuda offices for White Mountains. Prior to his time with White Mountains, he was vice president and manager of marine and energy reinsurance for NAC Re.

Mulcahy will serve as chief actuary at ILS Capital and a member of the firm’s investment committee. Prior to joining the firm, he was employed at Securis, another specialist ILS investment manager, and, prior to that, was chief actuary at Ariel Re. Before he joined Ariel Re, he was chief actuary of White Mountains Underwriting Ltd. and LaSalle Re. He is a Fellow of the Institute of Actuaries.

Both of the new hires have worked with ILS Capital’s CEO Don Kramer before at Ariel Re, a firm which Kramer founded and subsequently sold to Goldman Sachs, and the fact that this team is coming back together will give the new specialty reinsurance linked investment offering some weight with potential investors. ILS Capital will be among the only investment managers offering a specialty reinsurance investment opportunity once it has this new side of its business up and running.

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