Insurance Linked Investments

The returns possible in insurance-linked securities (ILS) investments remains at a near record, as the Eurekahedge ILS Advisers Index continues to track at its highest performance level since 2007.

Captive insurance structures are still largely a self-insurance tool for their sponsors, but there is a market there for captives that might look to offload risks, or books of business, towards the end of their lives, David Gibbons of PwC Bermuda told us in a recent video interview.

Helios Underwriting, the Lloyd’s of London focused investment and underwriting vehicle that counts some insurance-linked securities (ILS) market sources among its capital backers, is aiming to expand its business through the rest of this year, with more third-party capital targeted to support the build out of its portfolio.

Palomar Insurance Holdings has purchased a reinsurance tower extending to $2.68 billion for earthquake events, with multi-year ILS capacity from its catastrophe bonds now providing $875 million of limit, thanks to its recently completed fourth cat bond deal.

We’ve learned that Elementum Advisors, LLC, the insurance and reinsurance linked asset manager, has raised $150 million from investors for deployment to opportunities presented by market dislocation at the mid-year renewals.

Ledger Investing, the insurance technology (insurtech) and insurance-linked securities (ILS) focused company, is reportedly set to be used as a vehicle through which to source capacity to support UK motor insurtech Pukka as it hunts for new reinsurance capital sources.

Velocity Risk Underwriters, a catastrophe exposed property insurance specialist managing general agency (MGA) operation that was originally set up by ILS manager Nephila Capital is set to acquire one of the fronting carriers from State National that had previously been a source of paper for underwritten business that was channelled to Nephila’s funds.

Having reported favourable development of its side pocket loss reserves through the final quarter of 2022, the CATCo retrocessional reinsurance investment portfolio saw this trend continue in Q1 of 2023 as well, with further gains made.

Bill Dubinsky, Chief Executive Officer of Gallagher Securities, has cautioned that building in more ESG features is potentially helpful but “by no means a guaranteed win-win” for the catastrophe bond product, or for ILS more generally.

Establishing insurance-linked securities (ILS) investment management operations and the impact of recent international tax developments in the industry was the focus of our latest Artemis Live video interview.