ILS as an asset class to offset financial market volatility: Aberdeen’s Brooks

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Mike Brooks, head of diversified multi-asset strategies at major investment manager Aberdeen Asset Management, has underlined the attractiveness of investing in the insurance-linked securities (ILS) space, particularly as a way to secure diversified returns during financial market volatility.

In an interview with The Edge Malaysia, Brooks discussed the ongoing volatility in financial markets, and how expectations of greater volatility throughout the year suggests investors might want to look at more alternative asset classes for returns, such as the ILS space.

ILS market thrives amid growing competition

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Bermuda’s insurance-linked securities sector is continuing to boom after a year in which it was tested by significant hurricane losses.

The Bermuda Stock Exchange ended April with total ILS market capitalisation of $28 billion, a record high for the exchange.

Capital markets gain increasing reinsurance influence: Aon

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The capital markets are becoming increasingly influential in reinsurance, according to broker Aon Benfield, who recognises that the growth achieved by insurance-linked securities (ILS) specialists puts them on an ever more even footing with traditional reinsurers.

The steady growth of alternative capital has transformed the reinsurance landscape. It’s undeniable that the re/insurance market is better off for it, in terms of the efficiency of its product offering and the cost of risk transfer.

Protectionism a challenge for re/insurers in emerging and mature markets

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Protectionism in the global insurance and reinsurance industry is often described as a hindrance to both emerging and mature market development, and despite the EU/U.S. covered agreement and other positive regulatory changes across the world, protectionism remains a challenge for industry players.

Protectionist measures in the insurance and reinsurance industry were recently highlighted by international law firm Hogan Lovells in its 2018 Insurance Horizons report, which explores protectionism in emerging markets, the UK’s impending departure from the EU, and the EU/U.S. covered agreement, among other trends.

Twelve Capital in sixteenth Dodeka private cat bond, a $23.567m Dodeka XIII

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Zurich headquartered insurance and reinsurance linked investment fund manager Twelve Capital Management has completed its sixteenth private catastrophe bond transaction in the Dodeka series, with a $23.567 million Dodeka XIII deal which was listed on the stock exchange in Bermuda yesterday.

ILS fund manager Twelve Capital uses these privately arranged and securitized deals to transform property catastrophe reinsurance or retrocession risks into an investable form that suits its liquid cat bond focused fund or investor mandates.

ILS placement efficiency highlights power of true syndication: WTWS

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The inherent efficiency of an insurance-linked securities (ILS) placement reduces the ability of one or two large players to dictate price and terms, something that can be evident in syndicated traditional reinsurance transactions, and which Willis Towers Watson Securities says can work help to level the playing field between markets.

In the aftermath of 2017 catastrophe events and the impressive response of the ILS community, reinsurance market participants have noted the permanence of alternative market capacity and its willingness and ability to pay claims.

AXA-XL ceded reinsurance & alternative capital to be led by van Zanden

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In preparing for its acquisition by French insurance giant AXA, Bermudian insurance and reinsurance firm XL Group has laid out some of the managerial changes to expect during the transition, but has highlighted that responsibility for ceded reinsurance and alternative capital will remain with Mark van Zanden.

Mark van Zanden is currently the Chief Executive of XL Catlin’s P&C Underwriting Capital Management, which gives him overall responsibility for the re/insurers ceded reinsurance activities and work with alternative capital providers.

ILS & reinsurance are Hedge Funds 2.0, says Future Fund CIO

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The world of hedge funds and alternative investment strategies is moving fast and the Chief Investment Officer of massive A$166 billion Australian sovereign wealth fund, the Future Fund, is happiest allocating to what he terms Hedge Funds 2.0, a categorisation that ILS and reinsurance fits into.

Speaking at the i3 Investment Strategy Forum in Victoria, Australia last Friday, Future Fund CIO Dr Raphael Arndt explained his thinking behind allocating to hedge funds, saying that the new breed of alternative investment managers are moving far beyond the more traditional vision of what is a hedge fund.

Amundi Pioneer seeks to add second ILS interval fund share class

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Asset management giant Amundi Pioneer Investment Management is seeking to add a second share class to its expanding U.S. mutual fund insurance-linked securities and reinsurance linked investment strategy, the Pioneer ILS Interval Fund, which would help to broaden its appeal to investors.

In a filing with the SEC, Amundi Pioneer Asset Management, Inc. requests an order from the U.S. Securities and Exchange Commission to permit the Pioneer ILS Interval Fund to issue multiple share classes, with different terms on each class.

Will Catastrophe Bonds Experience a “Retail Revolution”?

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During a track at the IFoA Asia Conference 2018 last week, a speaker laid out a “future state” vision that included access to insurance-linked securities (ILS)—or at least some version of ILS—for retail investors. I’ve heard this notion raised many times over the past decade, but aside from some isolated examples, it really hasn’t come to pass yet—at least not
with scale.

Typically, the reason given involves the nature of the risk as well as the importance of investor sophistication. Without calling the validity of this view into question, I still see a broader challenge in play: available capital.