Top ILS manager assets increased through H2 2020

As a group, the assets under management of the top-tier of insurance-linked securities (ILS) investment fund managers had increased through the second-half of 2020, Artemis’ data shows.

According to data included in our Artemis Insurance Linked Securities Investment Fund Manager Directory, in which we list dedicated ILS investment managers, asset managers who also operate ILS fund strategies and re/insurers managing ILS investments, the assets under management of the top-tier increased in the second-half of last year.

We’ve now updated the figures for many of the ILS investment managers featured, although for some we only have data to the end of the third-quarter of the year.

But it is clear that the overall ILS and reinsurance assets under their management has grown in recent months, with the ten largest managers of ILS and third-party reinsurance investment assets featured in Artemis’ ILS fund manager directory now standing at over $61 billion.

The top-ten ILS managers assets has stood higher, reaching over $64 billion in 2018 and having stood over $63 billion a year earlier, in Q3 2019.

But the fact the leading managers have not shrunk much further and have in fact grown, in terms of their combined ILS and reinsurance assets, through 2020, is certainly a sign of ILS market recovery from the losses of recent years and of growing confidence in the asset class as well.

A few of the top-ten ILS managers have now extended their ILS assets to new highs, in particular: LGT ILS Partners Ltd. (including its direct ILS investments and ILS multi-manager solutions) now at $7.8 billion; Fermat Capital Management, LLC now at $7.5 billion; Leadenhall Capital Partners LLP now at over $6.2 billion; RenaissanceRe now at $6 billion.

Looking more broadly, at ILS investment fund managers with more than $2 billion of assets under management as a group, the total ILS assets across this subset of Artemis’ ILS fund manager directory now sits at just under $81 billion.

There are a number of highlights within this grouping as well, with some of the ILS fund managers outside the top-ten, but still commanding more than $2 billion of ILS assets, having grown this year as well.

Also having extended their ILS assets to new, or maintained them at, highs in 2020 are: Schroder Investment Management at $3 billion; Hudson Structured Capital Management Ltd. which has experienced strong growth to $2.6 billion; Swiss Re with $2.5 billion across its sidecars and managed cat bond portfolio; and Neuberger Berman ILS at $2 billion.

Driving some of the increase in ILS assets has been the active year of catastrophe bond issuance in 2020, as ILS funds with a focus on these more liquid reinsurance linked assets have been able to raise new funds from investors to help them take advantage of the record level of catastrophe bond issuance in 2020.

In addition, some ILS managers have raised new capital to take advantage of the improvements in broader reinsurance and retrocession rates. For this reason we suspect that once we have figures for year-end 2020 assets for more of those included, the total will likely rise for the top-ten and those ILS managers with over $2 billion of assets under management.

It’s important to note that there is some duplication of assets in our Directory, even within the upper-tiers its challenging to split assets out given the way the industry works, transacts amongst parties and invests across risk sharing agreements.

It’s also worth pointing out that we include re/insurer owned managers of third-party and ILS assets as well, given the institutional investor base tends to look at these alongside dedicated ILS investment fund managers.

We’re also aware there is some outdated information in the lower tier of ILS managers by assets, which we’re trying to remedy at this time.

But we hope our Insurance Linked Securities Investment Fund Manager Directory proves useful.

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