Insurance Linked Investments

Mike Brooks, head of diversified multi-asset strategies at major investment manager Aberdeen Asset Management, has underlined the attractiveness of investing in the insurance-linked securities (ILS) space, particularly as a way to secure diversified returns during financial market volatility.

The inherent efficiency of an insurance-linked securities (ILS) placement reduces the ability of one or two large players to dictate price and terms, something that can be evident in syndicated traditional reinsurance transactions, and which Willis Towers Watson Securities says can work help to level the playing field between markets.

The London-listed Blue Capital Alternative Income Fund, the stock exchange listed insurance and reinsurance linked investment strategy run by Blue Capital Management, a division of global re/insurer Sompo International, delivered an impressive 0.61% return in April 2018, a clear demonstration of post-event ILS return potential.

Asset management giant Amundi Pioneer Investment Management is seeking to add a second share class to its expanding U.S. mutual fund insurance-linked securities and reinsurance linked investment strategy, the Pioneer ILS Interval Fund, which would help to broaden its appeal to investors.

Insurance and reinsurance broking giant Aon has named John English as the new Chief Executive Officer (CEO) of the firms Captive & Insurance Management business, a unit that includes teams looking after numerous insurance-linked securities (ILS) structures and vehicles.

The world of hedge funds and alternative investment strategies is moving fast and the Chief Investment Officer of massive A$166 billion Australian sovereign wealth fund, the Future Fund, is happiest allocating to what he terms Hedge Funds 2.0, a categorisation that ILS and reinsurance fits into.

According to John Forney, the CEO of United Insurance Holdings (UPC Insurance), the firms recently completed $3.1 billion reinsurance program featured a “heavy dose of collateralized limit” and at the same time more capital market investors were attracted to invest in its latest Armor Re II Ltd. catastrophe bond.

In preparing for its acquisition by French insurance giant AXA, Bermudian insurance and reinsurance firm XL Group has laid out some of the managerial changes to expect during the transition, but has highlighted that responsibility for ceded reinsurance and alternative capital will remain with Mark van Zanden.

Tangency Capital Ltd., a recently launched insurance-linked securities (ILS) investment venture that has a focus on quota shares, has raised its first $50 million from a seed investor and begun to deploy the capital following its “differentiated” quota share focused investment strategy.

Boutique alternative investment specialist Hatteras Funds is set to launch a new insurance-linked securities (ILS) and reinsurance linked investment mutual fund arranged as an interval structure, becoming the latest company to offer reinsurance-linked investments to advisors and clients.