Insurance Linked Investments

According to Swiss Re Capital Markets, the insurance-linked securities (ILS) market continued the growth trend of recent years throughout 2024, as the last twelve months were marked by a “robust performance” for cat bond investors in the absence of events large enough to have a significant impact on the market.

Recent estimates suggest that insured losses from the Los Angeles, California wildfires could be higher than anticipated. As a result, catastrophe bond prices are showing signs of weakness, with the market’s benchmark recording its first-ever negative January return since its inception over two decades ago, according to cat bond fund manager Icosa Investments AG.

The launch yesterday of the Lumyna – Twelve Capital Parametric ILS Fund, a dedicated parametric insurance and insurance-linked securities (ILS) investment strategy managed by ILS manager Twelve Capital, is a “breakthrough” in the parametric space and provides “capacity for profitable growth”, senior execs at GC&C and Descartes Underwriting said.

Aon Insurance Managers (IM), the unit of the global insurance and reinsurance broker that provides insurance management services, across commercial, captive and insurance-linked securities (ILS) vehicles, has hired Charlotte Shreeve as its new Director of ILS North America.

With capital levels of insurance-linked securities (ILS) reaching new highs in 2024, and returns across the market remaining attractive, “with particularly strong catastrophe bond issuance,” rating agency Fitch anticipates sustained robust growth in the supply of alternative reinsurance capital throughout 2025.

Leadenhall Capital Partners, the London headquartered specialist insurance linked securities (ILS) and reinsurance related investments manager, has hired experienced ILS fundraising executive Barthelemy Thomas as Director within its business development team, where he will report to Lorenzo Volpi, Managing Partner and Deputy CEO.

Twelve Capital, the Zurich-headquartered insurance-linked securities (ILS) and reinsurance investment manager, has launched its first parametric ILS fund, working with Lumyna Investments for infrastructure and distribution, and parametric specialist Descartes Underwriting alongside Generali’s Global Corporate & Commercial arm for origination.

According to Eric Andersen, President of broking giant, Aon, the insurance-linked securities (ILS) market continues to be a very “boutique business within reinsurance” for the firm, in terms of the scale of the traditional reinsurance treaties seen across the industry on property cat, liability and specialty.

According to Gallagher Re, reinsurers within the EMEA regions looked to obtain growth across Europe at the key 1/1 renewals, with many offering more capacity as they aimed to achieve their growth mandates which came almost exclusively from incumbent reinsurers, in part empowered with ILS-fueled new sidecar capacity. 

Private ILS funds outpaced pure catastrophe bond funds in the full-year performance of the Eurekahedge ILS Advisers Index, while the average return across all of the insurance-linked securities (ILS) fund strategies tracked was 13.10% for 2024.