SCOR, the French reinsurer, have recently published their new strategic three year plan dubbed ‘Strong Momentum‘. A lot of the presentation which details the plan is devoted to SCOR Global Investments (SGI), their investment management arm and how they want to expand it and increase its contributions to group profits.
One of the initiatives that SGI will be launching is a new insurance-linked securities investment fund called Atropos. They are initially planning to fund Atropos themselves with $100m of seed capital but they want to take third-party investment as well. The fund is being established in Luxembourg and they intend to have it open for subscriptions at the end of the year.
SCOR says that Atropos will mainly invest in catastrophe bonds with some collateralized insurance swaps, collateralized reinsurance and in certain cases industry loss warranties.
By launching this fund SCOR aim to turn their experience in reinsurance, catastrophe risk and cat bonds into a new revenue stream by charging management and performance fees for third party fund investments. They say that the target is to achieve a return of approximately 10%. The portfolio is to be diversified by peril, geography, tenor, first/second event, rating and expected loss which should ensure interest from investors looking for ILS investment options.