Swiss Re to create new fund for institutional and designated professional investors to access natural catastrophe business
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- Swiss Re subsidiary Swiss Re Insurance-Linked Investment Management Ltd (SRILIM) has received authorisation from FINMA to act as an asset manager for investment funds
- SRILIM will manage a newly created standalone fund, offering investors an efficient way to participate in Swiss Re’s natural catastrophe business
- The move expands Swiss Re’s risk-sharing platform, strengthening its strategic partnership with third-party capital providers
Swiss Re, through its subsidiary Swiss Re Insurance-Linked Investment Management Ltd has received authorisation from the Swiss Financial Market Supervisory Authority (FINMA) for an asset management licence for funds. With this approval, the company will manage a standalone fund company, 1863 Fund Ltd, which will allow investors a new avenue to access Swiss Re's natural catastrophe business.
The Core Nat Cat Fund, the initial fund under the newly created company, will mark the first time Swiss Re opens its natural catastrophe portfolio to investors through a permanent fund format. For investors, this move offers an easily accessible and widely accepted investment format to participate in a high-quality natural catastrophe portfolio underwritten by Swiss Re.
Martin Bisping, CEO of Swiss Re Insurance-Linked Investment Management Ltd, said: “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 move to attract additional alternative capital through a standalone fund company is in line with Swiss Re’s strategy to expand its natural catastrophe capacity. In 2019, Swiss Re established its Alternative Capital Partners team, specialised in creating investment partnerships with third parties through various forms, such as insurance-linked securities, retrocession, sidecars and the newly created fund platform.
John Dacey, Swiss Re’s Group Chief Financial Officer, said: “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.“
The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. It is organised into three Business Units, each with a distinct strategy and set of objectives contributing to the Group’s overall mission.
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Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.
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- the frequency, severity and development of insured claim events, particularly natural catastrophes, man-made disasters, pandemics, acts of terrorism or acts of war;
- mortality, morbidity and longevity experience;
- the cyclicality of the reinsurance sector;
- central bank intervention in the financial markets, trade wars or other protectionist measures relating to international trade arrangements, adverse geopolitical events, domestic political upheavals or other developments that adversely impact global economic conditions;
- increased volatility of, and/or disruption in, global capital and credit markets;
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- changes in legislation and regulation, or the interpretations thereof by regulators and courts, affecting the Group or its ceding companies, including as a result of comprehensive reform or shifts away from multilateral approaches to regulation of global operations;
- the lowering or loss of one of the financial strength or other ratings of one or more companies in the Group, and developments adversely affecting its ability to achieve improved ratings;
- uncertainties in estimating reserves, including differences between actual claims experience and underwriting and reserving assumptions;
- policy renewal and lapse rates;
- uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes and certain large man-made losses, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
- legal actions or regulatory investigations or actions, including in respect of industry requirements or business conduct rules of general applicability;
- the outcome of tax audits, the ability to realize tax loss carryforwards and the ability to realize deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings, and the overall impact of changes in tax regimes on the Group’s business model;
- changes in accounting estimates or assumptions that affect reported amounts of assets, liabilities, revenues or expenses, including contingent assets and liabilities;
- changes in accounting standards, practices or policies;
- strengthening or weakening of foreign currencies;
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- failure of the Group’s hedging arrangements to be effective;
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- extraordinary events affecting the Group’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
- changing levels of competition;
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- limitations on the ability of the Group’s subsidiaries to pay dividends or make other distributions; and
- operational factors, including the efficacy of risk management and other internal procedures in anticipating and managing the foregoing risks.
These factors are not exhaustive. The Group operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
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