Insurance Linked Investments

Thanks to a very strong first-half of investment returns from the catastrophe bond market, the Swiss Re cat bond Index, probably the most widely used benchmark in the insurance-linked securities (ILS) space, has delivered a record performance for any half-year on record.

Strong growth in catastrophe bond and insurance-linked securities (ILS) assets thanks to successful capital raising efforts sees Fermat Capital Management now fast-approaching the landmark $10 billion in AUM.

Plenum Investments, the Zurich based specialist catastrophe bond and insurance-linked securities (ILS) investment manager, has surpassed US $1 billion of assets under management for the first time, with its catastrophe bond strategies benefiting from investor demand.

Re2, a climate risk transfer specialist located in Bermuda operated by alumni of ILS manager Nephila Capital, has announced the completion of a first of its kind Battery Revenue Swap for a Blackrock fund portfolio energy company.

Resolute Global Partners, the insurance and reinsurance linked asset manager, has partnered with insurtech Nayms to bring to market the first industry loss warranty (ILW) to be denominated in a cryptocurrency.

Insurance-linked securities (ILS), or alternative, capital is expected to grow to become a $150 billion market by 2030, but traditional reinsurance capital is expected to grow at a faster pace over the same period, according to an estimate from analysts at investment bank Berenberg.

Expansion of the insurance-linked securities (ILS) asset class into other lines of business such as cyber risks is not likely to be a case of a reallocation away from property, rather Artex Capital Solutions executives believe that incremental growth of non-cat ILS is to be expected.

Seaside Re private catastrophe bond transactions from the 2020, 2021, and 2022 vintages continue to have their maturity dates extended, to allow for ongoing development of catastrophe losses that could trigger them, with almost $110 million of notes having their maturity extended out to mid-October.

While catastrophe bond funds might have similar return expectation metrics, the tail-risk inherent in each cat bond fund strategy can “differ tremendously,” depending on the underlying portfolio construction, a new study from Plenum Investments shows.

Cyber reinsurance capacity needs to grow threefold by 2030 to support the cyber insurance segment in fulfilling its potential, and focus is needed to maintain momentum in making third-party capital a key component of the cyber market’s capital structure, broker Howden has said.