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Swiss Re targets nat cat portfolio growth with ILS fund launch

30th November 2020 - Author: Luke Gallin

Reinsurance giant Swiss Re is looking to expand its risk-sharing platform and strengthen its strategic partnership with third-party capital providers with the launch of a new standalone fund company, which enables investors to access the firm’s natural catastrophe business.

Swiss ReSwiss Re Insurance-Linked Investment Management Ltd (SRILIM), a subsidiary of Swiss Re, has received authorisation from FINMA to act as an asset manager for investment funds.

Following the approval, SRILIM will manage and create a standalone fund company, 1863 Fund Ltd, offering investors an efficient way to participate in the reinsurer’s natural catastrophe business.

The initial fund under the newly created firm is the Core Nat Cat Fund, and signals the very first time Swiss Re has opened its nat cat portfolio to investors through a permanent fund format. For investors, Swiss Re says that this move offers an easily accessible and widely accepted investment format to participate in a high-quality nat cat portfolio underwritten by Swiss Re.

Chief Executive Officer (CEO) of SRILIM, Martin Bisping, commented: “This new fund will open a unique opportunity for investors to invest in the same book of business as Swiss Re, benefitting from Swiss Re’s global reach, client access, risk knowledge and underwriting.”

The reinsurer notes that this latest move is in-line with its strategy to expand its natural catastrophe capacity. In 2019, the firm launched its Alternative Capital Partners team, which is specialised in creating investment partnerships with third parties through a variety of forms, such as insurance-linked securities (ILS), retro, sidecars, and newly created fund platforms.

John Dacey, Swiss Re’s Group Chief Financial Officer (CFO), added: “Swiss Re has laid out a clear pathway for its Alternative Capital Partners strategy. This allows for targeted growth of our natural catastrophe portfolio, while giving investors an attractive diversifying investment opportunity in an easily accessible format. With this new fund set up, we are broadening our partnership with alternative capital providers.”

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