Ledger Investing, a tech-enabled financial services company, has completed a secondary $250 million casualty insurance-linked securities (ILS) transaction to three institutional investors.
According to the announcement, the secondary transaction nearly represents a diversified portfolio across four lines of business. This includes: Workers’ Compensation (WC), General Liability (GL), Private Passenger Auto (PPA), and Commercial Automobile (CA), as well as 25 individual programs.
Ledger explained that there was considerable interest from investors, with approximately $80 million of capital invested.
The transaction demonstrates Ledger Investing’s commitment to delivering innovative financial solutions that create value and generate liquidity in the casualty ILS market.
One major highlight of this transaction is robust demand from institutional investors for securitized casualty risk.
In particular, demand from private credit and special situations funds has been strong.
Ledger noted that the interest for this risk is driven by its similar target returns and weighted average life (WAL) while offering a return stream that is unrelated to the rest of their portfolios.
Samir Shah, Ledger Investing CEO, commented on the transaction: “Many said that it isn’t possible to securitize casualty risk, and yet we have securitized over $1 billion of premium since our first transaction in 2019.
“They said it was not possible to create liquidity in casualty risk, and now we have shown that indeed it is possible to create a secondary market. We look forward to unlocking the full potential of casualty ILS as we redefine the future of capital management for insurers and investment strategies for asset allocators.”
Alex Freiberg, CEO, Ledger Capital Markets, LLC, said: “The increasing demand from sophisticated financial institutions for casualty ILS affirms its multi-pronged value proposition within private credit, absolute return, and other areas of client portfolios. We recognize the immense potential casualty ILS holds in providing both stability and diversification to our investors’ holdings. We’re excited to be at the forefront of this emerging and highly attractive asset class.”
