Swiss Re Insurance-Linked Fund Management

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Swiss Re comfortable it’s treated alternative capital investors well, including on Ian: Dacey


Reinsurance giant Swiss Re is comfortable that it’s treated the investors in its alternative capital structures well, including when it comes to recent hurricane Ian, Group CFO John Dacey has said.

swiss-re-building-logo-newSpeaking Friday afternoon during an analyst call, Dacey explained that Swiss Re’s Alternative Capital Partners (ACP) unit continues to make good headway in partnering with insurance-linked securities (ILS) investors.

The Alternative Capital Partners (ACP) team at Swiss Re leads on all things alternative capital, including the reinsurance firm’s ILS asset management activities, its catastrophe bonds, collateralised reinsurance sidecars and other initiatives where it partners with investors to share in the economics of the risk it underwrites.

Dacey said that, “This team continues to do well in securing capacity. We’re not dependent the way some other market participants might be on retrocessions.

“But what I can say is the alignment of interest between the group and these partners, and the transparency we’ve been able to provide on losses has served us well.”

He highlighted that Swiss Re has more than US $3 billion of assets under management in that space, as well as another over $1 billion in outstanding catastrophe bonds from the Matterhorn Re program.

An important point Dacey mentioned, is that Swiss Re feels it has served its investors well, even after hurricane Ian.

The reinsurance firm has been saying it was underweight Florida, and Dacey feels that will have been evident to the investors it has partnered with as well.

“We’re very comfortable that we’ve been treating our co-investors well,” Dacey said.

Going on to explain that, “I think the underweight exposure that we’ve been able to show on the Florida loss is an example of that, and we will continue to work with potential investors who are willing to stay with us over time.

“So, it’s been a good story for us.”

How ILS strategies and alternative capital vehicles respond to losses from Ian could turn out to be a differentiator for raising capital going forwards, with those who can demonstrate their strategies were more insulated from the major hurricane’s losses, than others, perhaps well-positioned for 2023.

Also read: Swiss Re expects “radical” price adjustment at January renewals: CFO Dacey.

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