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ILS Advisers is the first Asia based investment consultant and investment manager focusing exclusively on Insurance Linked Securities (ILS)

ILS Advisers was established in 2012 as a business unit of the HSZ Group and has been a pioneer in the asset class since its inception. It has been the initiator and sponsor of the Eurekahedge ILS Advisers index since 2012, which is the first and most comprehensive ILS fund index and has become a widely followed benchmark by ILS investors globally.

ILS Advisers is uniquely positioned to originate and structure reinsurance risk from Asia. The firm successfully structured and arranged the award winning Phoenix Re series of Pan-Asia focused catastrophe bonds, which provide additional reinsurance capacity to 13+ regions in Asia Pacific, where the insurance protection gap remains significant and growing. Phoenix 1 Re was named “Asia Insurance Initiative of the Year for 2021”.

“Experienced, Innovative and Leading ILS Asset Manager, with unique access to Asia“

Company Profile

  • Founded in 2012, ILS Advisers is Asia’s first and only ILS specialist manager
  • Investment team combines over 40+ years of relevant ILS and reinsurance experience
  • Have regularly advised to both Singapore and Hong Kong governments on the development of their local ILS eco-systems and regulatory regimes
  • Track record of strong performance, innovation and market leadership

ILS Advisers is a business unit of HSZ Group, focused exclusively on Insurance Linked investments. We are a specialist firm for the Insurance Linked Securities industry, including advising, securitization, placement and asset management.

Logo ILS Advisers

Award Winning
Origination

We work directly with a targeted group of cedants to source privately originated, bespoke transactions customized for our portfolio mandates. 

Award Winning
Origination

Product Innovation

We design and structure portfolio accretive transactions for our own portfolio directly with ceding insurers, which enables deals which fit seamlessly with our portfolio.

Product Innovation

True Independence

We are exclusively focused on asset management and free from investment banking, private banking or insurance agendas.

True Independence

Accretive Diversification

Our portfolio diversification is primarily derived from sourcing and designing bespoke private transactions which are provide better investment opportunities than those available by the widely syndicated public issued diversifiers (e.g. EU, Japan, ANZ cat bonds). 

Accretive Diversification

Unmatched Data and Information

HSZ Group established the industries first and most comprehensive ILS fund index in 2012, providing significant insight into market trends and developments.

Unmatched Data and Information

Integrated Technology Platform

Fully integrated modelling technologies. Combining industry standard modelling tools, with latest in climate physics modelling technology. 

Integrated Technology Platform

HSZ Group

HSZ Group is a Hong Kong based independent investment manager regulated by the SFC. It was founded in Switzerland and spun off from HSBC Guyerzellerbank AG in 2000. HSZ Group is a specialist investment manager for listed Chinese equities.

Team

Stefan K. Kräuchi
CEO and Partner of HSZ Group

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In his previous role he was a Member of the Executive Board of Clariden Leu Ltd., where he was in charge of the Products & Services Division (AUM over CHF 20bn and 340 employees). In his capacity he strategically positioned and developed the bank’s sizable ILS business in Europe as well as in the Asia Pacific area.

Before joining Clariden Leu in 2007, he worked for over seven years at AIG Inc. as the CEO of AIG Fund Management (Switzerland) and as a member of the Management Committee at AIG Private Bank. During his time at AIG he was instrumental in pioneering and developing products in the ILS space for the Swiss market. Since 2006 Stefan acted also as Head of International Fund Business Development of AIG Investments.

After his graduation at the University of St. Gallen (Switzerland), he began his career at UBS AG in 1990 as Financial Analyst and Portfolio Manager where later on he was appointed to Head of Investment Research and Portfolio Manager for the markets Japan, Far East and North America. Afterwards, he was responsible for Global Equities and worked as Senior Representative for Private Banking Investment Services at UBS Asset Management in Chicago.

From 2003 until 2007 Stefan was also a Board Member of the Swiss Funds Association (SFA).

Stefan is a Swiss citizen. He is married and has one daughter.

Timothy Yip
Executive Director of Insurance Linked Securities

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Tim Yip is an Executive Director and oversees HSZ Group’s ILS Advisers unit. 

In his previous role, he was an Executive Director since 2014 at Willis Re’s head office in London, as part of their Global Specialties reinsurance division, where his focus was on Retrocession, Marine and Energy, and Aviation. Previous to this role, Tim worked with Aon Benfield for 8+ years in their Sydney, Hong Kong and London offices. His experience includes programme placement, product design, actuarial and catastrophe modelling, and pricing for many of the largest insurance and reinsurance companies and programs globally.

Tim graduated from the University of Toronto with a degree in Actuarial Science in 2005. He is a Fellow of both the Institute of Actuaries (UK) and the Society of Actuaries (USA).

Stéphane Julen
Senior Adviser,
Portfolio Management,
Research and Strategy

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After more than 20 years with leading global asset management groups in the U.S. and Switzerland, Stéphane Julen founded Galix Investments. During his career, Mr. Julen has developed a deep knowledge of sophisticated investment strategies and global markets. His experience spans all areas of the investment process: research, manager selection, portfolio management, trading, risk management and investor relations. Mr. Julen has spent a large part of his career in senior positions analyzing, evaluating and monitoring alternative investment funds from both a quantitative and qualitative standpoint. He has successfully managed multi-manager portfolios combining active strategy allocation and best-in-class manager selection.

Beside this strong command of investment products, Mr. Julen has built over the years a deep global network of trusted relations with investors and industry specialists. He holds a Masters in Finance from the University of Lausanne (HEC). Mr. Julen is a CFA Charterholder and Certified European Financial Analyst. He is fluent in English, German and French.

Andreas Zell
Senior Advisor,
Actuarial and Analytics

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Andreas has been a consultant to the ILS Business of HSZ Group siince 2014, bringing over 25 years of diverse experience in the reinsurance industry. During this time, Andreas has worked for and with various Reinsurers in Switzerland and Singapore (including Allianz Re and Swiss Re), having held a range of positions in Pricing, Reserving and Risk Management. Besides his extensive actuarial experience, Andreas has also held several non-actuarial positions, mainly in Underwriting, with profit responsibility for a number of Reinsurance markets in the Asia/Pacific region.

Andreas graduated from the University of Basel/Switzerland with a masters degree in Actuarial Science and Statistics. Full Member (Fellow) of the Swiss Association of Actuaries and Associate Member of the Singapore Actuarial Society.

Specialties: Reinsurance (non-life), Reinsurance Pricing, Reserving, Treaty Underwriting, Risk Management, Catastrophe Management, Insurance-Linked Securities.

Joey Tang
Chief Operating Officer of HSZ Group

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Joey Tang is responsible for the office management and operation of HSZ (Hong Kong) Limited. Her main duties include investment administration, compliance and information technology management.

Joey graduated from Imperial College London with a Master of Science degree in Management.

Oliver Rothenberger
Consultant to HSZ Group

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Oliver has more than 20 years’ experience in financial markets, with 17 years dedicated to asset management business between Germany and Switzerland. Based in Switzerland since 2006, he has worked for BNP Paribas Investment Managers in Frankfurt, Germany and Zurich, Switzerland before as well as for Natixis Global Asset Management and Fundo S.A. in Switzerland.

He holds a diploma from the University of Constance, Germany as well as the 2nd state exam of the Land Baden-Württemberg, Germany. He speaks English, French and German.

Investment Strategy

Insurance Linked Securities

Insurance-Linked Securities (ILS) are special financial tools that assist insurance companies in managing their risk. Think of them as a form of insurance for insurers, much like how you might buy insurance to protect your home or car.

Catastrophe Bonds (Cat Bonds) are a popular liquid form of ILS. Similar to other fixed income securities, cat bonds provide investors with periodic coupons in exchange for providing risk capital to insurance companies to help manage risks. However, Cat Bonds have a unique feature: their repayment is tied to the occurrence (or non-occurrence) of large-scale disasters, such as hurricanes in Florida. If the specified disaster doesn’t happen during the bond’s term, investors earn interest on their money, often at rates higher than what traditional bonds offer.

The appeal of Cat Bonds lies in their potential for high returns and their independence from traditional financial markets’ volatility. This means that Cat Bonds don’t necessarily follow the trends of the stock or bond markets, making them a good way to diversify an investment portfolio, much like mixing different types of investments such as stocks, bonds, and real estate.

Before becoming available for investment, each Cat Bond goes through a thorough review process. This is similar to how a company’s stock might be evaluated, with careful consideration of its legal structure, the quality of the underlying risk, and the potential return on investment.

“A true alternative asset class, with structural returns largely independent of equity and credit markets.”

Low Correlation to Traditional Financial Markets
  • Risk is derived from the occurrences of severe natural catastrophe events.
  • Specialist asset class offering true diversification.
Attractive Risk vs Return Potential
  • Historically have provided long-term positive returns relative to other asset classes (both traditional and other alternatives).
  • Diversification across multiple perils and regions, each largely independent of each other.
Inflation Hedged and Limited Credit Risk
  • Investment is held in a collateral trust separate from the sponsoring insurer, and invested in money market funds or US Treasuries.
Attractive Market Timing
  • Current market cycle is providing investors with the most opportunistic entry point in decades

Catastrophe Bonds

Catastrophe Bonds are the most senior form of reinsurance instrument and a source of private market financing specific for the insurance industry.

Two Sources of Return

Source of Return

Reinsurance Risk Premium

  • Dictated by reinsurance market cycle
  • Currently in the midst of the hardest market cycle in decades

Return on Permitted Investments

  • Invested in US Money Market Funds
  • Interest rates are at highest point in a decade

Source of Risk

Internal Independence

Geographical and peril diversification offers managers an ability to construct portfolios containing independent sources of risk. 
(i.e. The occurrence of a major Earthquake in Beijing is independent of the occurrence of a major tropical Hurricane in Florida)

Fixed Income Alternative

Reinsurance premiums plus Permitted Investment Yield provide fixed income like periodic coupons.

Floating Rate & Inflation Hedged

Collateral is held in trust off balance sheet and invested in MMFs.

Minimal Sponsor Credit Risk

Collateral is held in trust, and premiums are typically pre funded prior to the relevant risk period. Source of risk (the occurrence of a severe natural catastrophe event) is independent of the source of return (ceding insurer).

Liquid Tradeable Instruments

Active secondary market.

Low Duration

Duration = ~ 3 months (floating rate bonds);

Maturity of Underlying Bonds = ~ 3 years (typically up to 5 years)