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Benedicte Gravrand, Opalesque Geneva:
For insurance risk as an asset class (aka "insurance linked securities" or ILS), this year’s financial markets sways did not create that many waves. Thus, according to Dirk Lohmann, managing partner of Secquaero Advisors, more institutional investors are looking at this asset class in their search for diversifiers.
Secquaero is a Freienbach, Switzerland-based investment firm launched four-and-a-half years ago, with a focus on investing in ILSs. ILSs are financial instruments whose values are driven by insurance loss events. Those that are linked to property losses due to natural catastrophes represent a unique asset class, the return from which is uncorrelated with that of the general financial market.
The European sovereign debt muddle did impact most financial institutions though, including insurance companies. Some of those now have a distressed balance sheet and need more soft capital in the form of re-insurance or securitizations, and this is creating opportunities for Secquaero.
"If you look at some of the really big insurance companies’ balance sheets that are heavily into life and pensions in Europe, you do not see any other way that they can get balance sheet relief. I do not see them raising capital in the capital markets, I can see them only secu...................... To view our full article Click here
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