Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Armour Group launch ILS Investment Management Limited.


Armour Group, a Bermuda based group of insurance, reinsurance and related service companies, have announced the formation and launch of a new insurance-linked investment focused asset manager who aim to target what they see as unique opportunities for uncorrelated returns in the current low-yield environment. ILS Investment Management Limited aim to offer a slightly different twist on insurance-linked investment opportunities by initially focusing on non-catastrophe sectors of the P&C market.

ILS Investment Management will focus exclusively on the insurance-linked strategies asset classes and with this focus on non-catastrophe risks could see a lot of interest from investors keen on the uncorrelated, attractive returns that insurance and reinsurance linked investments can offer but who are looking for a new source of diversification. They say that the non-catastrophe P&C sectors are not well served by the existing insurance-linked investment market.

It’s not immediately clear what type of assets ILS Investment Management intend to invest in, we have reached out to them for some insight on this but so far have not received a response, but it could include non-catastrophe retro lines or instruments such as non-elemental industry loss warranties (ILWs). Other assets could include run-off assets or distressed/discontinued books of business as this is an area Armour Group specialise in.

Interestingly ILS Investment Management Limited have been formed as a sub-adviser of Credit Suisse Asset Management and they issued a press release together yesterday discussing insurance linked investment strategies and particularly run-off investment strategies. So it does look like run-off investments could make up a big part of the new business.

Brad Huntington and John Williams, the two founding principals of Armour Group will assume senior management roles in ILS Investment Management Limited. Demonstrating the groups commitment to this space, Mr. Huntington and Mr. Williams will concurrently relinquish any day-to-day operational role in the Armour Risk services division of the Armour Group.

Together Mr. Huntington and Mr. Williams bring more than 50 years combined experience in the non-catastrophe based sectors of the Property and Casualty markets. They also previously acted as founders and principals in the investment manager for Brevan Howard P&C Master Fund, a non-catastrophe Property and Casualty focused ILS fund.

This new insurance-linked investment manager could offer an interesting opportunity to investors seeking to put more capital into the ILS space but away from the typical catastrophe bond and catastrophe reinsurance lines of business. The more opportunities that exist for diversification the more capital we could see flow into the sector which is a positive thing for all market participants in the markets we cover.

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