The emergence of whole portfolio ILS


The emergence of whole portfolio ILS

The insurance-linked securities market has enjoyed growth and innovation in recent years. A new development spearheaded by Guy Carpenter could revolutionise the way re/insurers interact with the sector. Intelligent Insurer reports.

Vario Global Capital, the new venture unveiled by Guy Carpenter and Vario Partners, will help create a new asset class of insurance-linked securities (ILS) that will revolutionise the way insurers manage their capital and which could grow to be six times bigger than the now established asset class of catastrophe-linked bonds, its founders claim.

Nick Frankland, chief executive of Guy Carpenter’s EMEA operations and director of Vario Global Capital, says the venture represents a natural evolution for the reinsurance industry—but that this product could become very important over time as insurers increasingly use it as part of their capital structures.

Vario Global Capital will offer non-life insurers the opportunity to buy high level protection effectively on a quota share basis covering their whole portfolio, using structures very similar to the catastrophe-based ILS deals that are now well understood by investors and cedants alike.

Vario Global Capital, Guy Carpenter, Nick Frankland, ILS, North America

Intelligent Insurer