Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Pension funds to invest more in catastrophe bonds, says Axa


Pension funds have been showing an increasing level of interest in the investment opportunity offered by the insurance-linked securities market in recent months. With many dedicated ILS and catastrophe bond investment boutiques now offering an easy way for a pension fund to invest in the asset class this interest is expected to grow and as a result help the market expand.

The opportunity to diversify an investment portfolio using a relatively non-correlated asset class such as catastrophe bonds and the attraction of the high returns that can be achieved are helping the market raise its profile to institutional investors who previously may not have considered cat bonds an option. Pension funds, with their large capital bases, are a natural fit for this market.

Global Pensions, an excellent magazine focused on the institutional pensions industry, reports today that the increasing involvement of pension funds in the catastrophe bond investment market will help investment managers increase their assets under management.

They interviewed Christophe Fritsch of Axa Investment Managers and he said that pension funds will help to drive new issuance of cat bonds to $6 billion or $7 billion this year and that the demand from pension funds will help them increase their assets under management.

Read the full article from Global Pensions here.

You can read our October interview with Christophe Fritsch here.

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