Swiss Re Insurance-Linked Fund Management

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ILS Capital Management Ltd. select AIR Worldwide for ILS portfolio management


Risk modeller AIR Worldwide have issued a press release discussing how a new client of theirs, ILS Capital Management Ltd. a company established with the help of reinsurance industry veteran Don Kramer, has signed up to use their risk models and portfolio management tools for a portfolio of insurance-linked securities, catastrophe bonds and reinsurance contracts. ILS Capital Management are one of the new bread of reinsurance-linked investment companies to appear in the market over the last year or so.

Tim Tetlow, president and COO of ILS Capital Management, Ltd. said; “We selected AIR as the main model for our risk management architecture because it is the best solution for modeling a diverse portfolio of ILS and traditional reinsurance contracts. It’s event-driven approach is critical in allowing portfolio correlation and seasonal aspects of underlying region-perils to be properly handled, important factors in managing accumulations and providing investors accurate net asset values. ILS Capital incorporates this framework in its proprietary ReSolution© system, which integrates and manages catastrophe risk in real time across multiple catastrophe models.”

AIR Worldwide says that more than 90% of the top 25 worldwide reinsurers use the software to assess traditional reinsurance submissions and manage their portfolios of catastrophe risk. By modeling all of a company’s catastrophe-linked investments and reinsurance contracts within the same software, AIR enables portfolio managers to understand the catastrophe risk associated with each instrument in a combined portfolio of insurance-linked securities and traditional reinsurance contracts.

Investors use the software to assess whether ILS, cat bonds and ILW contracts fit well within their portfolio of risk investments. AIR’s software also contains a database of all existing cat bonds to allow investors to identify trading opportunities.

“AIR’s approach to model and software development is consistent with values that we believe are essential to understanding and managing the underlying risk,” continued Tetlow. “AIR delivers scientifically advanced models using a robust oversight process that ensures its models reflect basic principles of the underlying hazard to yield reasonable results.”

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

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