insurance private debt

Insurance-linked securities (ILS) investment manager Twelve Capital has adopted a defensive stance in the face of the market volatility caused by the financial market upheaval, although the company believes insurers are much better positioned than banks at this time.

The crisis being seen in banking sectors, most prominently with the failure of Silicon Valley Bank and sale of Credit Suisse to UBS, is not a crisis of the insurance sector, and there are no fundamentals to support the recent revaluation of insurance debt, Plenum Investments has stated.

Investing in insurance bonds looks even more compelling now against the broader macro-economic backdrop of volatile markets, according to Dinesh Pawar, Head of Insurance Bonds at specialist sector investment manager Twelve Capital.

Insurance bonds should not be ignored as a defensive investment opportunity with both yield and upside potential, according to Twelve Capital, with the manager believing that market dynamics have created a particularly attractive entry point for investors.

Investors should be looking at subordinated insurance debt bonds as with spreads elevated the opportunity to invest into the bonds issued by highly capitalised companies with high Solvency II ratios is an attractive opportunity, according to Plenum Investments.

The resilience of the global insurance and reinsurance market through periods of protracted stress makes investing into insurance-linked debt a reliable component for any investors fixed income allocation, according to asset manager Twelve Capital.

Fixed income financial services investment specialist Cohen & Company, has made a $45 million debt investment into Brotherhood Mutual Insurance Company through its subsidiary Dekania Capital Management.

Insurance bonds as an asset class are yet again showing their resilience amid recent market turmoil, while spreads have reset to levels last seen a few years ago, presenting an investment opportunity, Twelve Capital has said.

The market for subordinated insurance debt bonds is expected to bottom out soon, as more clarity is gained on the future direction of interest rates. But while this can slow issuance of insurance bonds and debt, specialist investment manager Plenum Investments believes an opportunity is emerging for investors to capitalise on market forces.

Twelve Capital Management, the Zurich-headquartered catastrophe bond, insurance-linked securities (ILS) and reinsurance linked investment fund manager, is expanding its strategies to include insurtech investments with the help of a new collaboration with specialist insurtech investor Eos Venture Partners.