Swiss Re Insurance-Linked Fund Management

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ILS managers need to provide solutions not just capacity: Securis


Investment managers operating in the insurance-linked securities (ILS) space should develop business models that are more solution focused rather than purely being capacity providers, according to executives at Securis Investment Partners.

Speaking at the Securis ILS Investor Meeting at the end of May 2015, Securis Chief Executive Officer (CEO), Rob Procter explained that the firm is committed to providing a solution-based model for its clients and cedents.

Procter said that at Securis they were focused on “how the model may evolve from being transactional in nature to being more solution driven, for clients and cedents.”

“I think we at Securis very much endorse this, I think we have long tried to work with our cedents to provide solutions that they want,” Procter explained.

He continued, saying that this includes being as flexible as possible, being innovative with its product offering and product design, to ensure cedents receive the insurance and reinsurance protection they desire and investors the best return.

Espen Nordhus, Executive Chairman at Securis, also discussed a solution-based approach to clients and cedents alike, with respect to opportunities created out of imminent Solvency II regulations.

“New regulations will force insurance companies to set aside new capital and they will be looking for solutions, and we’re going to be right up there talking to them, we are out there talking to them, about providing solutions where we can take over risks from them,” said Nordhus.

Continuing to explain that these risks are perhaps uncommon to what most people are used to on the non-life reinsurance side of ILS, including mortality and longevity risks, but these are “risks that can be modelled and will add value to the portfolio,” noted Nordhus.

It’s important that ILS managers become more solution focused, as the sector increases its capital base and seeks to become a partner for cedents, rather than just provider of capacity. Building lasting relationships, on both sides of the business, will help ILS asset managers to prosper.

Providing solutions, over just being a capacity provider, will enable Securis and other ILS managers to better service their cedents while also constructing the best possible portfolios for their clients.

Both Procter and Nordhus emphasise Securis’ commitment to ILS and that they see a challenging and interesting future for the ILS market, one full of opportunities.

Procter said; “We will only work in ILS, it’s what we do and what we want to excel at, and what we want to be the best at. We will always put profit before volume, in the interest of our investors, with who we are closely aligned.”

A point echoed by Nordhus; “One thing that hasn’t changed with Securis is that we are an asset manager and not an insurance company, we work for the investors.”

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