responsible investment

Dirk Schmelzer of Plenum Investments AG has urged insurance-linked securities (ILS) market participants to realise that ESG is not just an opportunity, but an essential component of the market’s future.

Generali, one of the largest global insurance and asset management companies, has recognised the potential for insurance and reinsurance linked investments to have green or ESG credentials and has developed a framework for Green insurance-linked securities (ILS).

As institutional investors look to asset classes that promote sustainable and responsible investing, increasingly, they are drawn to the environmental, social and governance (ESG) qualities of insurance-linked securities (ILS), according to Greg Wojciechowski, President and Chief Executive Officer (CEO) of the Bermuda Stock Exchange (BSX).

The ongoing expansion of the insurance-linked securities (ILS) asset class is increasingly supported by government and NGO activity, while investors take advantage of a compelling ESG proposition, according to Andries Hoekema, HSBC Global Asset Management and Helen Goonewardene, HSBC Issuer Services.

Entropics Asset Management AB, the Swedish manager of a catastrophe bond fund, has formalised its focus on cat bonds as responsible investments, as it specifies investments as such in its prospectus and expects to report how cat bonds it holds contribute to the sustainable development goals (SDG’s).

Investing in insurance-linked securities (ILS) and other reinsurance linked assets that are broadly uncorrelated with wider financial markets are gaining in appeal, as alternative asset class allocations grow and a focus on ESG quality assets increases.

Insurance-linked securities (ILS) and insurance-linked investments (ILI) in general have been identified as an example of a Sustainable Development Investment, according to experienced ILS investors Dutch pension fund manager PGGM and pension PFZW.

The argument for responsible investment (RI) in insurance-linked securities (ILS) can be seen in both society, with the benefits of insurance protection, and environmental benefits, such as building financial resilience to climate change, argue ILS market experts as part of a recent roundtable discussion.