Third-party sources of reinsurance capital and the use of insurance-linked securities (ILS) has become increasingly important for Aspen Insurance Holdings Limited, the Bermuda headquartered insurance and reinsurance group, leading to success in capital raising for the firm.
Aspen’s dedicated unit that managers third-party capital and ILS funds or sidecars, Aspen Capital Markets, lifted its third-party assets under management to almost $700 million at the end of 2019, a figure which we understand to have risen a little further since.
Ever since investment funds under the management of Apollo Global Management, LLC closed their acquisition of Aspen in early 2019, information on the progress made in the Capital Markets unit has not been as readily available.
But it now appears that Aspen has continued to have some success in this area, building on its activities in the main utilising the Peregrine Re special purpose vehicle, which serves as the home for Aspen’s fully-collateralized reinsurance quota-share business ever since the sun-setting of its Silverton Re sidecar, alongside private managed funds.
Aspen Capital Markets specialises in tailor-made portfolios for investors through managed insurance-linked securities (ILS) funds, as well as quota share sidecar structures which utilise the Peregrine Re vehicle.
While growth of third-party assets has not been exponential, which has been the experience of most in the ILS market over this period, Aspen Capital Markets has increased its third-party AuM from around $550 million at the end of 2017, to now closer to $700 million by the end of 2019, perhaps a little more by this time.
Given the impacts seen to ILS positions from major catastrophe losses beginning in 2017 and running through the following years, as well as the impacts from trapped ILS collateral, the fact Aspen has increased its assets during this time frame should be seen as a vote of confidence from third-party investors.