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
  • Provide consistent returns in well-diversified portfolios
  • Typically not exposed to duration or interest rate risk
  • Liquidity provided by the secondary market for catastrophe bonds (ILS) and by Staggering of different financial insurance contracts (FIC) in a portfolio