Reinsurance News

Swiss Re launches catastrophe bond focused investment adviser

4th August 2022 - Author: Luke Gallin

Global reinsurance giant Swiss Re has enhanced its insurance-linked securities (ILS) offering with the launch of Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC), a new investment advisory entity with a particular focus on catastrophe bonds.

According to Swiss Re, its new and wholly owned subsidiary, SRILIAC, adopts an investment strategy that complements that of Swiss Re Insurance-Linked Investment Management Ltd. (SRILIM), which was launched in 2020 with a focus on natural catastrophe reinsurance contracts.

As a SEC registered investment adviser, the newly launched SRILIAC’s investment strategy will focus on ILS, primarily catastrophe bonds. This, says Swiss Re, will enable investors to access the reinsurer’s capabilities in catastrophe bond investments, natural catastrophe modelling, and underwriting.

Now, with the opportunity to leverage both investment managers SRILIM and SRILIAC, qualified institutional investors can access Swiss Re’s core natural catastrophe book of business, or the broader catastrophe bond marketplace alongside Swiss Re, the world’s largest reinsurance company.

Maria Giovanna Guatteri, Chief Executive Officer (CEO) of the investment advisory business, commented: “Swiss Re has been trading and investing in ILS for over two decades. Now we are opening our capabilities to institutional investors, allowing them to benefit from our track record and established risk analytics, portfolio management and operational expertise. We believe that our focus on catastrophe bonds will closely align with investors who value liquidity and transparency.”

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Philipp Rüede, Head of Alternative Capital Partners at Swiss Re, added: “This move comes as the natural next step in the Group’s strategy to have Swiss Re’s Alternative Capital Partners expand the options for attractive investment partnerships with institutional investors. SRILIAC’s investment strategy allows investors to benefit from Swiss Re’s experienced team and a cat bond portfolio constructed through disciplined risk selection.”

As tracked on our ILS-focused sister site Artemis and its extensive deal directory of catastrophe bond transactions, Swiss Re has sponsored a fair amount of its own catastrophe bonds over the years, the most recent being a $200 million Matterhorn Re Ltd. (Series 2022-2) deal in June.

At the same time, the company has been managing a portfolio of cat bonds for a number of years now, not just its own, and that internally managed portfolio stood at more than $1 billion in size in late 2021 and is likely larger now.

So, it seems that the establishment of SRILIAC is about Swiss Re opening up that portfolio to external investors, as well as formalising it under an investment advisor.

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