Swiss Re launches its first nat cat ILS fund to boost alternative capital access

Global reinsurer Swiss Re is launching a new standalone fund company allowing investors to access its natural catastrophe business, in a bid to attract additional alternative capital.

The move aims to expand its risk-sharing platform and strengthen its strategic partnership with third-party capital providers.

The reinsurer's subsidiary Swiss Re Insurance-Linked Investment Management (SRILIM) has received authorisation from the Swiss Financial Market Supervisory Authority (FINMA) for an asset management licence for funds.

SRILIM will create and manage a standalone fund company, 1863 Fund, offering investors a new avenue to access Swiss Re's natural catastrophe business.

The initial fund under the newly created Core Nat Cat Fund company will mark the first time Swiss Re opens its natural catastrophe portfolio to investors through a permanent fund format. For investors, the company says it offers an easily accessible and widely accepted investment format to participate in a high-quality natural catastrophe portfolio underwritten by Swiss Re.

The reinsurer notes that the move is in line with its 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.

Martin Bisping, CEO of Swiss Re's SRILIM, 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."

John Dacey, Swiss Re’s group chief financial officer, 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."