SCOR hails fund success; tackles growth
As SCOR Global Investments marks the third anniversary of its insurance-linked securities (ILS) fund, the challenge for further growth now lies with those sourcing the risk, Maria Rapin, ILS portfolio manager, SCOR Global Investments, told Monte Carlo Today.
Despite being very pleased with the success of Atropos, which marks its anniversary with a net average annual return to investors of 7.2 percent, Rapin says that the challenge of new investors must be tackled.
“On the fund side of things, things are now pretty stable and there isn’t a lot of room for many more dedicated ILS managers, but the challenge is going to be with those guys sourcing the risks. They need to come up with a creative way to get people into the market,” she said.
However, Vincent Prabis, head of ILS strategies, SCOR Global Investment, said that despite tough conditions, the company is still gaining the returns that it needs.
“I’m not saying that we’re happy with the price or the terms and conditions or softening, but we’re still managing to find what we need to deliver the strategies we’re working on,” he said.
SCOR Global Investments has attracted substantial attention despite its short, three-year existence. As Rapin explains, being linked to the French reinsurer has been a contributing factor.
“As institutional investors get more used to the asset class, they find that partnering with a fund that’s linked to a traditional reinsurer such as SCOR is really advantageous—especially for the more collateralised contracts,” she said.
“We’re still separate from the P&C side of the business but our parent has reinsurance in its DNA. A lot of investors appreciate that.”
Prabis added: “We are a unique entity within the asset manager of SCOR. We don’t see what SCOR is seeing but, to show the alignment of interest, SCOR has invested from its asset side. This doesn’t mean, though, that we can put any of the SCOR risk in the portfolio.”
She also explained that the acceptance of ILS as a respectable asset class has been important.
“We’re hearing that traditional reinsurers are now viewing ILS in a different way. It’s no longer seen as the ‘new boy’ at school,” she said.
Prabis added: “There was a genuine fear that ILS was going to be a completely undisciplined class, and I think that when the Munich Re cat bond was rejected earlier in the year, there was a genuine sigh of relief. It was a sign that there was less desperation to deploy capital.”
