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CPPIB added $1.225bn to ILS & reinsurance-linked strategies in FY 2018


The Canada Pension Plan Investment Board (CPPIB), a major institutional investor with $368.5 billion at the end of last year, had put US $1.225 billion to work in reinsurance-linked and ILS strategies during 2018, including some towards back-up coverages following the 2017 catastrophe loss events.

canada-pension-plan-investment-boardThe Canada Pension Plan Investment Board (CPPIB) is a significant investor into insurance and reinsurance markets, through its public and private equity stakes in major firms, including Ascot, Enstar, BGL Group and Wilton Re.

Of its huge $368.5 billion investment pot around $37 billion was committed to external fund manager mandates in CPPIB’s fiscal year 2018, with a number of investments made in ILS funds and collateralized reinsurance strategies it transpires.

After the increased incidence of major catastrophe events in 2017, the CPPIB said it had allocated US $225 million specifically into back-up coverage for re/insurers through partner managers from the insurance-linked securities (ILS) funds space.

In addition, the CPPIB allocated a further US $1 billion to work to “strategically increase our provision of natural catastrophe reinsurance coverage to insurers globally.”

The $1 billion of deployment into ILS and reinsurance came as a response to the “improved pricing environment” in global reinsurance, the CPPIB said.

The CPPIB has long-standing investments in both Nephila Capital and Fermat Capital Management, with another mandate added to a vehicle managed by reinsurance firm RenaissanceRe in 2017, we understand.

It’s likely all of these managers benefitted from some additional inflows thanks to CPPIB’s growing appetite for ILS and reinsurance-linked returns from its additional allocations in FY 2018.

It appears that the allocations were made in late 2017, for the back-up coverage $225 million and Q1 of 2018 for the additional $1 billion to take advantage of an improved rate environment.

It’s not known at this time whether CPPIB has added further allocations to capitalise on the ongoing improvements in reinsurance rates seen in 2019 so far.


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