ESG investment in insurance-linked securities (ILS)

ESG investing is a growing focus for the insurance-linked securities (ILS) market.

Insurance-linked securities (ILS) are often assumed to be naturally compatible with and applicable to environmental, social, governance (ESG) investment mandates and standards.

Certainly, ILS such as catastrophe bonds have ESG relevant features, in providing disaster risk financing to support recovery and repair after severe weather events or natural disasters.

But the true application of ESG investment standards to reinsurance and ILS assets requires much deeper thought and the industry continues to work towards provision of truly ESG compatible ILS investment opportunities.


Beazley announces launch of ESG syndicate-in-a-box at Lloyd’s

Beazley has now received in principle approval from Lloyd’s to establish its planned ESG focused consortium that will sit under its Market Facilities unit and leverage some third-party capital to underwrite risks that have been scored against environmental, social and governance (ESG) metrics. The ESG underwriting consortium will sit within Syndicate read the full article →

Catastrophe capital charges. Time for an update?

There's a lot of talk in the industry about the potential for important rating agency capital charges associated with property catastrophe risks to be updated soon, to account for what some are now viewing as a changed, or different, loss environment. Recent catastrophe loss years have seen elevated frequency and severity read the full article →

Allocations to alternative investments to increase, ESG a factor: Eaton Partners

A survey of institutional investors by Eaton Partners found that almost two-thirds intend to increase their allocations to alternative asset classes and private capital markets, with 9% of respondents targeting non-correlated assets specifically, while ESG is also seen as an important factor for future investment flows. “As the world navigates new read the full article →

BlackRock aims to raise $2.3bn+ for ESG fund that targets cat bonds

Giant asset manager BlackRock is aiming to raise more than $2.3 billion for its new environmental, social and governance (ESG) investment fund strategy that includes catastrophe bonds as one of its target asset types. As we were the first to cover back in August, the investment manager is marketing the soon read the full article →

Red Cross volcano cat bond issuance recognised for ESG credentials

The first parametric catastrophe bond covering pure volcanic eruption risk, which was brought to market by Replexus and Howden Capital Markets and for the Danish Red Cross has been recognised for its environmental, social and governance (ESG) credentials. The Guernsey International Insurance Association (GIIA) has awarded its first environmental, social and read the full article →

Twelve Capital hires two to strengthen ESG & climate investment focus

Specialist catastrophe bond, insurance-linked securities (ILS) and reinsurance investment manager Twelve Capital has announced two new hires that bring sustainable and climate investing expertise to the company. Both of the particularly experienced professionals have specific expertise in managing investments in the area of climate change. Daniel King-Robinson and Tobias Engeli have both read the full article →

ESG regulations pose tough questions for ILS managers: Synpulse’s Smith

The recent Sustainable Finance Disclosure Regulation (SFDR) introduced by the EU poses “significant challenges” and tough questions for ILS fund managers looking to build a green reputation, notes Joel Smith, Associate Partner at Synpulse Management Consulting. Speaking with Artemis, Smith noted that the regulations will require many fund managers to re-assess read the full article →

Fitch sees “breakout” potential for ILS, could double by 2030

The insurance-linked securities (ILS) market has "breakout" potential as the sector returns to growth, increasing numbers of new sponsors enter the market, including from outside of insurance and reinsurance, but the real catalysts for future expansion could be climate change and ESG, Fitch Ratings believes. Fitch has a particularly bullish outlook read the full article →

Equity investors query reinsurer’s use of ILS and ESG quality: Autonomous’ Ritchie

Equity investors focused on the reinsurance sector question whether insurance-linked securities (ILS) deliver cost-of-capital benefits, while also finding it hard to consider reinsurers an ESG appropriate investment, Andrew Ritchie, Partner, Insurance Research at Autonomous Research LLP said today. Ritchie was participating in Munich Re's 13th annual insurance-linked securities (ILS) roundtable, which read the full article →

Bermuda has opportunity to lead the way on ILS ESG: Roundtable

As momentum continues to accelerate around responsible and sustainable investing, Bermuda’s standing in the global insurance-linked securities (ILS) sector means it’s well placed to capitalise on the growing base of environmental, social and governance (ESG) focused investors, say industry experts. We recently published our sixth Bermuda ILS Executive Roundtable, held virtually read the full article →