ILS funds news, insurance linked securities or ILS fund news

The well-established and growing life insurance-linked securities (ILS) segment offers a very stable profile and true diversification for investors, both within ILS and when compared to traditional asset classes, according to industry experts.

Reflecting very strong market activity in the first-half, catastrophe bond funds in the UCITS format saw their combined assets under management (AUM) rise by over 18%, to reach a new record-high of nearly $10.4 billion by the end of June 2023.

Yesterday’s Artemis ILS Asia 2023 conference marked our first in-person return to Singapore and the Asian region since 2019 and while there are marked differences in the conversation surrounding insurance-linked securities (ILS) and the use of reinsurance capital, it is clear the region remains relatively untapped, on both an investment and risk basis.

Commentary attributed to Everest Group CEO Juan Andrade helps to drive home the fact that reinsurance and so also many ILS strategies are now sitting higher up the catastrophe risk tower, with larger industry loss events required to meaningfully involve them in paying claims.

Delivering a welcome speech this morning at the Artemis ILS Asia 2023 conference in Singapore, Cheng Khai Lim, Executive Director, Financial Markets Development Department, Monetary Authority of Singapore (MAS), highlighted the need for greater structuring and deal capabilities in Asia, as Singapore continues to streamline its insurance-linked securities (ILS) regulatory regime.

The pension fund of global beverage and food giant the Coca Cola Company saw its allocation to insurance-linked securities (ILS) shrink again in 2022, falling by almost 26% over the course of the year, to just $246 million.

After a very busy first-half for the catastrophe bond market saw issuance of property cat bonds reach a new high of $9.7 billion, the Artemis community is forecasting the market will remain busy through the rest of 2023.

The BofA Securities analyst team say they are increasingly constructive on the reinsurance sector, one reason being that alternative capital growth is not being driven by the collateralized side of the ILS market, while catastrophe bonds are seen as a more compatible instrument and complementary to traditional reinsurance.

Insurance-linked securities (ILS) investment management specialist Nephila Capital has written just over $756 million of the $2.98 billion reinsurance placement by Florida Citizens at the renewals in 2023, but Berkshire Hathaway was the largest participant with a huge $1 billion line.

Capital raised in reinsurance and insurance-linked securities (ILS) year-to-date remains far below the level required to threaten the current hard market cycle, according to analysts at J.P. Morgan.