Aspen Insurance Holdings Limited, the Bermuda headquartered insurance and reinsurance group, continued to see success in its management of third-party sources of reinsurance capital and the use of insurance-linked securities (ILS) structures, with its assets under management rising to $800 million in 2020.
Aspen’s dedicated unit that managers third-party capital and ILS funds or sidecars, Aspen Capital Markets, grew its third-party assets under management to almost $800 million at the end of 2020, up from $700 million a year earlier.
Aspen has continued to experience success in this area, building on activities that in the main utilise the Peregrine Re special purpose vehicle, which serves as the home for Aspen’s fully-collateralized reinsurance quota-share business, alongside private managed funds.
Aspen Capital Markets specialises in constructing tailor-made portfolios of reinsurance for investors through managed insurance-linked securities (ILS) funds, as well as quota share sidecar structures which utilise the Peregrine Re vehicle.
In announcing its results today, the company explained the importance of the Aspen Capital Markets unit.
Mark Cloutier, Group Executive Chairman and Chief Executive Officer, explained that during 2020 Aspen worked to expand its capital markets capabilities, seemingly with some success already being seen.
“In our capital markets business, total capital grew to just over $800 million,” Cloutier said.
At the same time, he further explained that, “Fee income arising from Aspen Capital Markets (“ACM”) operations increased $16.9 million year over year to $32.6 million.”
$23.6 million of the ILS fee income earned was attributed to Aspen’s reinsurance segment, while the remaining $9.1 million was attributed to its insurance segment, showing that Aspen is using third-party capital across its business.
It’s more important than this fee income though, Aspen is using its capital markets and ILS management business as a way to help manage volatility ion its own results.
“In addition to providing additional income, ACM has played an important role in our efforts to manage down earnings volatility,” Cloutier said.
“Capital markets business and investors are key partners in our further growth and innovation efforts,” the company’s results statement explained.
To which Cloutier added, “We view our capital markets business and investors as key partners in our future growth and innovation efforts.”
Aspen Capital Markets is one of the dedicated insurance-linked securities (ILS) fund managers and reinsurers offering ILS-style investment opportunities listed in our Insurance-Linked Securities Investment Managers & Funds Directory.