Investing in Hurricanes: A concise introduction to reinsurance, catastrophe bonds and insurance linked funds
Book Details
Author(s)Adam Alvarez
PublisherAlvarez & Associates Limited
ISBN / ASINB00ZB3HC3E
ISBN-13978B00ZB3HC30
MarketplaceFrance 🇫🇷
Description
Reinsurance is not complicated but it is full of jargon. This 50 page booklet introduces the key ideas that are necessary to make an informed investment in insurance linked funds. Introduced by the former partner responsible for the Goldman Sachs catastrophe bond business, the guide systematically explains the funds and their underlying assets.
Alternative asset classes promise investors opportunities to generate returns that are weakly correlated to the debt and equity markets. Hedge funds, REITS and commodity funds as well as niches such as wine, art and stamp funds all promise absolute returns that are independent of the stock market. But we live in an interconnected world and experience has shown that, in stressful times, all of these strategies are affected by what is happening in the rest of the economy.
Insurance linked funds have experienced rapid growth in recent years by successfully making the argument that catastrophe reinsurance is an asset class that is less correlated than most. Whilst a financial collapse might cause people to buy less wine, stamps or art it won't cause a hurricane, earthquake or tsunami.
The first two parts outline the types of asset that an insurance linked fund can invest in. Part one explains what reinsurance is, why it is bought and how funds can invest in it. Part two explains insurance linked securities which are a newer structure that perform similar function as reinsurance.
Part three of the guide looks at the funds themselves. There is little consistency between the strategies of insurance linked funds. Understanding the strengths and weaknesses of each approach might make a big difference to investments when the next loss happens.
The book is supported by insurancelinked.com - The online resource for catastrophe bond and insurance linked investments. The website provides up-to-date news and analysis on the insurance linked fund industry.
Alternative asset classes promise investors opportunities to generate returns that are weakly correlated to the debt and equity markets. Hedge funds, REITS and commodity funds as well as niches such as wine, art and stamp funds all promise absolute returns that are independent of the stock market. But we live in an interconnected world and experience has shown that, in stressful times, all of these strategies are affected by what is happening in the rest of the economy.
Insurance linked funds have experienced rapid growth in recent years by successfully making the argument that catastrophe reinsurance is an asset class that is less correlated than most. Whilst a financial collapse might cause people to buy less wine, stamps or art it won't cause a hurricane, earthquake or tsunami.
The first two parts outline the types of asset that an insurance linked fund can invest in. Part one explains what reinsurance is, why it is bought and how funds can invest in it. Part two explains insurance linked securities which are a newer structure that perform similar function as reinsurance.
Part three of the guide looks at the funds themselves. There is little consistency between the strategies of insurance linked funds. Understanding the strengths and weaknesses of each approach might make a big difference to investments when the next loss happens.
The book is supported by insurancelinked.com - The online resource for catastrophe bond and insurance linked investments. The website provides up-to-date news and analysis on the insurance linked fund industry.
