Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Securis Investment Partners grows non-life share of their fund in January


London based insurance-linked investment fund manager Securis Investment Partners has deployed significant capital into non-life risks during the last month. Before the recent capital deployment the Securis 1 Fund was weighted quite heavily towards life risks, but given the more attractive pricing of non-life catastrophe risk after the record losses of 2011, Securis decided to deploy additional inflows of capital into non-life risks at the January renewals.

At the renewals Securis deployed $100m into renewing some existing private non-life trades. They also deployed another $130m into a number of new non-life opportunities. We’re told that much of this deployment was making use of a new investment mandate Securis received after recently acquiring a new large investor in the UK.

Securis say that the pricing environment is selectively attractive at the moment, with rate increases in U.S. wind risk potentially not enough to offset the impact of the recent risk model changes and the impact they will have on the view of risk. However they have seen much larger rate increases in lines of business affected by loss events in 2011, as an example they say they have recently closed transactions exposed to Australasian perils and U.S. tornado and hail risks. Prior to 2011 they saw these perils as underpriced.

The impact of this non-life push by Securis is that the Securis 1 Fund is now more balanced at 53% life risk and 47% non-life risk. They haven’t reduced their life exposure rather the inflow of investor capital has been deployed into catastrophe reinsurance and retrocession.

We spoke with Rob Procter of Securis who told us that they now have $1.13 billion of assets under management and have seen a 43% increase in this figure in the last year. Much of this growth was due to new investor inflow and mandates acquired over the last year. He also told us that the Securis 1 Fund returned 4.06% over the course of 2011 which is a very good figure when compared to many insurance-linked investment funds. Rob put a lot of this down to their balanced life/non-life strategy as this meant that the record catastrophe losses of 2011 had less of an impact on their returns than other funds experienced. We asked whether Securis planned to continue their move into non-life and catastrophe risks while market conditions were attractive to do so. Rob Procter said that they likely would consider other non-life opportunities, recognising the attractiveness of selected opportunities at the moment, but aimed to continue to keep a balance between life and non-life in the Securis 1 Fund.

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