Artemis Live - Insurance-linked securities (ILS), catastrophe bonds (cat bonds), reinsurance 38: Capital - Constraints, fundraising successes & challenges - Prospectus 2021 conference
Feb 1, 2021
01:07:56
This was the fifth session of Prospectus 2021, a new annual reinsurance and insurance-linked securities (ILS) conference brought to you by Artemis in collaboration with sister title Reinsurance News in November 2020.
Focusing on the capital and investments side of both reinsurance and insurance-linked securities (ILS), the expert panellists discussed the impacts of the COVID-19 pandemic on the sector's capital raising abilities.
They highlighted the new wave of capital going to both established entities, as well as to new startups across reinsurance.
Greg Hagood, Co-Founder of Nephila Capital explained, "For the existing companies it’s interesting because obviously liquidity is abundant, capital’s flowing and there’s easy to access capital right now in the world. So, it seems to me that part of that capital raise is likely defensive; shoring up past reserves, shoring up the balance sheet; a lot of uncertainty around COVID.
"So, part of that raise was probably defensive, and part of it is likely offensive."
Also participating in the panel discussion were: Stephan Ruoff, Head of Schroder Secquaero; Henning Ludolphs, Managing Director, Retrocession & Capital Markets, Hannover Re; and John Butler, Managing Director, Cohen & Company.
Butler of Cohen & Company highlighted that investors have been very supportive of insurance, reinsurance and ILS companies through the pandemic.
While at the same time the opportunity to invest in re/insurance has become very attractive right now.
"We see very attractive opportunities for investment moving forward, and I think our investors now feel that there is sufficient clarity to understand how this has been affected by the current situation and what the changes will be moving forward," Butler said.
Ruoff of Schroder Secquaero explained that he sees capital flowing to more predictable insurance-linked securities (ILS) structures.
"I think it comes down to what you call the alignment of interest, and the alignment of interest with the manager that’s the fiduciary of the money, or with the management team, or the capital providers and the management team when it comes to building new structures," Ruoff noted.
Focusing on the capital and investments side of both reinsurance and insurance-linked securities (ILS), the expert panellists discussed the impacts of the COVID-19 pandemic on the sector's capital raising abilities.
They highlighted the new wave of capital going to both established entities, as well as to new startups across reinsurance.
Greg Hagood, Co-Founder of Nephila Capital explained, "For the existing companies it’s interesting because obviously liquidity is abundant, capital’s flowing and there’s easy to access capital right now in the world. So, it seems to me that part of that capital raise is likely defensive; shoring up past reserves, shoring up the balance sheet; a lot of uncertainty around COVID.
"So, part of that raise was probably defensive, and part of it is likely offensive."
Also participating in the panel discussion were: Stephan Ruoff, Head of Schroder Secquaero; Henning Ludolphs, Managing Director, Retrocession & Capital Markets, Hannover Re; and John Butler, Managing Director, Cohen & Company.
Butler of Cohen & Company highlighted that investors have been very supportive of insurance, reinsurance and ILS companies through the pandemic.
While at the same time the opportunity to invest in re/insurance has become very attractive right now.
"We see very attractive opportunities for investment moving forward, and I think our investors now feel that there is sufficient clarity to understand how this has been affected by the current situation and what the changes will be moving forward," Butler said.
Ruoff of Schroder Secquaero explained that he sees capital flowing to more predictable insurance-linked securities (ILS) structures.
"I think it comes down to what you call the alignment of interest, and the alignment of interest with the manager that’s the fiduciary of the money, or with the management team, or the capital providers and the management team when it comes to building new structures," Ruoff noted.