ILS investment manager Securis to expand global reach

by Artemis on March 11, 2014

London-based insurance-linked securities and reinsurance-linked investments manager Securis Investment Partners will open offices in Bermuda and Australia this year as it positions itself for a new phase of growth, the firm told Artemis.

Securis is currently based out of its London offices, although its employees spend a lot of time in Bermuda given the markets key role in property catastrophe reinsurance, as does every ILS manager, and Securis has had a representative in Australia for a few years.

By establishing a Bermuda office Securis is seeking to position itself closer to one of the key reinsurance trading markets. It is a further sign of the importance of collateralized reinsurance in ILS that managers want to be close to trading partners and where the risk originates. Securis feels being close to the source of many of its key business partners in the U.S. and Bermuda will help to grow its relationships and ultimately the origination side of its business.

Conversely the Australian office is driven by gaining enhanced access to the region’s growing institutional investor base as well as origination. Securis has had a representative, Sean Peak, who has been based in Adelaide for a few years. Of course the Australasian reinsurance market is also a growing focus for ILS managers so the fact that Peak has a broker background and has a senior role in origination will be an important opportunity for the firm.

With competition high for new catastrophe reinsurance business the value placed on relationships within the ILS community is growing and origination is a key focus. On the other side of the ILS business model, increasing access to new institutional investor markets which have not been tapped by the full ILS market is also vital.

Securis will open its Bermuda office for business at the beginning of May, in time for the key mid-year reinsurance renewals when much of the Florida and U.S. catastrophe business is renewed. Senior non-life originator at Securis, Paul Larrett, previously at Montpelier Re so already connected on the island, will move to Bermuda to open the office there.

Securis is also going to expand its collateralized reinsurance infrastructure into Bermuda. The firm uses cell structures and reinsurance vehicles in Guernsey, and will continue to do so, but it is currently seeking Bermuda Monetary Authority approval for a special purpose reinsurance vehicle and an insurance manager, giving it a larger platform for underwriting collateralized reinsurance covers.

Rob Procter, CEO of Securis Investment Partners, commented “We continue to position Securis as one of the leading players in the ILS space. We see growth in our infrastructure – people, systems, operations, and connectivities – as critical, and a natural part of this is to have a physical presence in both of the world’s major catastrophe market places, London and Bermuda. A Bermuda presence will be an excellent complement to our London base.”

The Australian office will open later this year, with non-life origination specialist Sean Peak, already based in Adelaide, set to launch the operations in Australia. Peak previously worked at broker Aon Benfield and Barclays Capital. He will have a dual focus on origination of business as well as growing investor contacts in Australasia and the region in conjunction with the existing investor facing team at Securis.

Neil Strong, Head of Non Life at Securis, who will oversee both offices said; “ We are fortunate to have someone of Sean’s calibre in situ in Australia. His experience and connectivity, will dovetail very nicely with our existing investor facing team. Sean’s presence in the region, will also enable us to facilitate and access brokers and cedants face to face on a regular basis, which we see as invaluable in the current market environment and in the future.”

This global expansion will be a trend we see other ILS managers follow in the future. As the sector grows and the competitive market environment and growing use of collateralized reinsurance structures increases the importance of being closer to sources of risk and the importance of strong relationships. It’s a sign of ILS managers growing and business models maturing, Securis itself now has around $2.3 billion of insurance linked assets under management and a team of over 30.

Adding a Bermuda office makes Securis the third ILS or insurance linked investment manager with operations in London and Bermuda, last year Nephila Capital opened an office in London as it sought to improve access to the London reinsurance hub and CATCo Investment Managers has recently added London-based staff as well.

Some ILS fund managers have partnerships with investment advisers in Australia already for enhancing access to the investor base there, but Artemis is not aware of any with an office based in the country at this time.

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