Solutions and Capabilities Insurance Linked Strategies
Credit Suisse’s Insurance Linked Strategies team (CSILS) has one of the longest track records in insurance-linked strategies (ILS). Since its inception in 2003, the team has firmly established itself as one of the leading ILS managers globally.
Over the years, the team and the assets under management have grown significantly. Today, more than 50 employees1 are fully dedicated to ILS, backed by a large number of support and control functions within the Credit Suisse Group. The CSILS team currently manages over USD 8 bn2 in assets and is among the largest providers of property catastrophe reinsurance in the world.
The asset class
ILS is an innovative niche asset class allowing investors to gain exposure to reinsurance catastrophe risks and earn returns largely uncorrelated to traditional and alternative asset classes. ILS funds take on the role of a reinsurer, covering for prespecified catastrophe risks, such as hurricanes or earthquakes, and receiving premiums in return. ILS funds are exposed to the risk of loss if such a catastrophe occurs. As a result, ILS investments can deliver attractive, stable returns in the absence of large insurance catastrophe events.
Insurance-linked strategies offer investors:
- Low correlation to traditional and alternative asset classes
- Attractive return potential on a risk-adjusted basis
- Floating returns with a fixed premium above the variable money market yield
- Investments in insurance-linked strategies are speculative and can lead to a substantial loss due to severe insurance catastrophe events or other events (e.g. unusual clustering of independent catastrophe events).