Insurance Linked Investments

Investing into the Lloyd’s insurance and reinsurance marketplace through its insurance-linked securities (ILS) structure has “unique capital efficiency” and Bill Cooper of TigerRisk believes the initiative could attract billions in funds from capital market investors.

According to data from AM Best, just $850 million of catastrophe bonds and other insurance-linked securities (ILS) are held by US insurers in their investment portfolios, a surprising low number given the evident diversification they can offer.

Acrisure, the expansive and technology focused insurance and reinsurance broking group, has launched a new syndicate at Lloyd’s, which the company says represents a direct route for investors to access high-quality risk from that marketplace.

Cedents are increasingly looking to diversify away from the “rhetoric” of the traditional reinsurance market and this is one of the factors causing Paul Schultz to be very constructive on catastrophe bond market development right now.

After increasing the size of its reinsurance sidecar transaction in 2021, followed by the issuance of its first catastrophe bond earlier this year, Hong Kong domiciled reinsurer Peak Re aims to further leverage the insurance-linked securities (ILS) market to close the protection gap.

Ledger Investing, the insurance technology (insurtech) and insurance-linked securities (ILS) focused company, has made another more senior hire, adding a new Director of Capital Markets, hired from a specialist alternative asset manager.

Bermuda headquartered reinsurance firm RenaissanceRe has added another hire to its third-party capital management Capital Partners team, with Preston Farrow joining as an Analyst.

For the insurance-linked securities (ILS) market to reach its full-potential, expansion through the provision of new lines of risk to a growing investor-base are key, while a one-way bet versus climate change won’t deliver the growth the sector deserves, according to Vesttoo’s Brian Kirwan.

Catastrophe bonds have been “the most successful of the children of Andrew,” and because of their greater contract certainty and performance, Michael Millette, Founder and Managing Partner of Hudson Structured Capital Management, expects more of ILS capital to shift into the bonds segment of the market.

Three factors are set to continue to drive the growth of the insurance-linked securities (ILS) market, the increasing institutional familiarity with the product, the correlation story continuing to be proved out and the best reinsurance market conditions in years, according to Stephan Ruoff, Schroders Capital’s Head of ILS.