
What are Insurance Linked Investments?
Insurance Linked Investments:
- Transfer insurance risks to the capital markets
- Performance depends on the occurence/non-occurence of an insured event
- Show low correlation with traditional asset classes and other alternative investments
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Provide consistent returns in well-diversified portfolios
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Typically not exposed to duration or interest rate risk
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Liquidity provided by the secondary market for catastrophe bonds (ILS) and by Staggering of different financial insurance contracts (FIC) in a portfolio