Healthcare of Ontario Pension Plan (HOOPP) lifts ILS investments 40% in 2023

The Healthcare of Ontario Pension Plan (HOOPP), a large Canadian institutional retirement fund, put additional capital into insurance-linked securities (ILS) in 2023, lifting its investments in the space above US $1 billion for the first time and growing them over 40% year-on-year.

A year ago, HOOPP’s annual report showed that the pensions insurance and reinsurance investment fund allocations had reached C$973 million (approx. US $718.7m), up from C$721 million (approx. US $575m) at the end of 2021.

Now, at Dec 31 2023, the Canadian pension plan reports that its ILS allocation has now reached $1.366 billion, an increase of just over 40%.

Which, at the reporting date, equated to US $1.03 billion, a new high for the pensions activities in the ILS market.

By the end of 2023, HOOPP’s overall pension assets stood at C$112.6 billion, up 9% over the previous year.

Which means the ILS allocation grew much faster than the overall pension fund. But of course, with 2023 a particularly strong year for ILS market returns, a component of the 40% growth will likely be retained earnings generated over the year from the reinsurance focused portfolio of investments.

The Healthcare of Ontario Pension Plan (HOOPP) began its allocations to insurance-linked securities (ILS) in late 2019, largely via insurance-linked funds, as well as some direct investments into other reinsurance-related securities.

HOOPP then hired Bernard Van der Stichele in 2020, an experienced ILS and reinsurance sector executive, as a Portfolio Manager for its Insurance-linked Securities allocation.

HOOPP was later seen to be shifting away from an equities focus, targeting a range of alternative asset classes including insurance-linked securities (ILS), as a way to help soften the blow of the market volatility seen as a result of the Covid-19 coronavirus.

In terms of size, HOOPP’s ILS allocation had reached roughly C$260 million in size at the end of 2019, before 2020 saw HOOPP growing the ILS investment program, expanding it to reach C$549 million at the end of that year (which was roughly US $440m at the time).

In 2021, HOOPP further expanded the ILS strategy, building it up to C$721 million (US 575m) by the end of that year, representing growth of just over 31% in Canadian dollars.

2022 saw additional growth in the ILS allocation at a time when HOOPP’s overall net assets shrank somewhat, so with the ILS allocation growing 35% to reach C$973 million in 2022, it meant the pension ended that year with its ILS investments nearing a 1% share of its total portfolio size.

Now, after a further 40% in size of the ILS allocation, HOOPP’s ILS investments now constitute 1.21% of its overall assets, as of the end of 2023 reporting date.

The Healthcare of Ontario Pension Plan (HOOPP) is just one of the numerous pension fund and major ILS investors we track in our directories here.