Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Swiss Re’s alternative capital assets under management reach $2.8bn


Global reinsurance firm Swiss Re has increased the alternative reinsurance capital assets under management in a range of insurance-linked securities (ILS) structures to $2.8 billion, with the recently launched 1863 Fund one area of the business to benefit.

swiss-re-building-imageSwiss Re has been managing assets in its collateralised reinsurance sidecar Sector Re since 2007, with the vehicle now a regular feature of the insurance-linked securities market, as a multi-investor, quota share ILS structure.

Of course, the reinsurer has always had a key role as a facilitator in the ILS market, not least in structuring and distributing catastrophe bonds, as well as other capital markets funded reinsurance deal.

In addition, Swiss Re has been using the ILS market for its own protection for many years, having been one of the first companies to sponsor cat bonds.

In fact, the first catastrophe bond issuance Swiss Re was involved in was right back in 1997, the very early days of the ILS market.

Fast forward to the present day and over the last two years Swiss Re has expanded its activities in the ILS space significantly, not least in its return to sponsoring cat bonds with the Matterhorn Re program.

As well as its multi-investor quota share sidecar Sector Re, Swiss Re has also been developing direct partnerships with major ILS investors as well.

These include its growing relationship with Dutch pension investor PGGM, through the Viaduct Re sidecar structure, a relationship which reached more than $500 million in terms of size, thanks to a second arrangement entered into last year.

Swiss Re also manages some third-party assets in an internally managed portfolio of catastrophe bonds.

The most recent developments at Swiss Re though and perhaps the most transformational going forwards, are the launch of its own ILS fund manager, Swiss Re Insurance-Linked Investment Management Ltd. and its first ILS fund.

Swiss Re Insurance-Linked Investment Management Ltd. was established in November 2020, alongside the launch of the reinsurance firms very first managed ILS fund, the 1863 Fund Ltd. and the Core Nat Cat Fund, which is the first investment fund strategy to be launched under 1863 Fund Ltd.

All of these activities have helped to drive ILS assets under management higher for Swiss Re, with the total now having risen to $2.8 billion, according to the updated information in our Insurance-Linked Securities Investment Managers & Funds Directory.

The total had reached nearly $2.5 billion in Q3 2020 We suspect a proportion of the recent increase in assets will have been thanks to the launch of Swiss Re’s ILS fund manager and in raising the first capital for its 1863 Fund strategy.

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