Insurance-Linked Strategies

What we do

Insurance-linked strategies (ILS) are an alternative form of reinsurance used by insurance companies and reinsurers to transfer peak event risk to the capital markets and thus optimize their regulatory capital requirements.

Investors are interested in ILS in view of their attractive and stable returns and their low correlation to traditional asset classes such as bonds and stocks or even alternative investments.

This low correlation reflects the fact that returns on insurance-linked investments depend solely on the occurrence of extreme insurance events such as large earthquakes or hurricanes. Developments in financial markets have very little impact on the performance of this asset class, as the structure of ILS excludes factors such as credit or interest risk.

Tradable and non-tradable forms of ILS

Investors can access such investments in two forms:

• Catastrophe bonds (cat bonds) – Insurance-linked securities are syndicated placements. They are tradable and have an average term of three years.
• Collateralized reinsurance investments (CRI) – This is a form of traditional reinsurance for primary insurers and is structured as a financial investment. CRI transactions are non-tradable and have an average term of one year.

Our approach – why partner with us

Our team of ILS specialists develops solutions that allow investors to participate in this asset class and benefit from the exceptional diversification it offers, including:

• Diversification across geography – We address the industry’s bias toward US wind perils by additionally spreading the risk in our portfolios across Europe, Canada, Japan, Australia and New Zealand, and across cat bonds and CRI transactions.
• Diversification across perils – We diversify risk in our portfolios across different peril categories, such as hurricanes, typhoons, cyclones and earthquakes, as well as across different trigger types and default probabilities.
• Mitigation of tail risk – Our investors benefit from uncorrelated risk exposures across the full range of potential catastrophe risks, resulting in well-diversified portfolios that are optimized to mitigate tail risk.
• High level of transparency – Investors can choose between conservative, balanced or enhanced strategies.

All our investment products and solutions also exhibit a clearly specified risk budget, thus providing the highest level of transparency and ensuring that investors are exposed to the same level of risk over time.

Team – an average of 18 years of industry experience

With a track record spanning almost two decades, we are one of the most experienced teams in ILS. We benefit from the combined expertise of 28 professionals from within the reinsurance industry with an average of 18 years of experience.