INSURANCE-LINKED SECURITIES (ILS)
Canopius ILS Limited, based in Bermuda, offers investors aligned access to Canopius’ (re)insurance portfolios underwritten on our global platforms. We provide a range of portfolio and bespoke products for investors to participate in.
Our expertise in alternative risk transfer and specialty lines (re)insurance allows us to structure and issue these transactions primarily through our Bermudian-based Special Purpose Insurer (SPI), Excelsa Re.
Since launching in 2018, Canopius ILS has delivered a long track of above-market risk-adjusted returns by aligning investor interest with those of the underwriter. Our ILS funds are designed to help investors diversify their portfolios with non-correlating investments against equity and bond market movements.
The Canopius Group has extensive experience managing capital for third parties, particularly through backing for our Lloyd’s syndicates. In addition to various deal structures across a wide range of business classes, Canopius ceded more than $140m of net premium to third party investors via the Excelsa Re ILS platform in 2023.
Contact the team to learn more about ILS strategies and insurance-linked investments to capitalise on the growing ILS market.
What makes us different
- Deep technical understanding of risk, allowing us to tailor solutions to the unique needs of our clients.
- Canopius is proud of its entrepreneurial culture, an outlook to support its goal to drive targeted growth.
- We are nimble, flexible, and able to listen to any client problem with its multi-class offering. This approach to practical innovation is reflective of how the Canopius Group does business with its partners.
KEY CONTACTS • REINSURANCE ILS
FAQs
What are Insurance-linked Securities?
Insurance-linked securities (ILS) are a means of ceding insurance-related risks to the capital markets. Cash flows from regular (re)insurance premium payments are transformed into interest-bearing securities. Since the first cat bond in 1997, ILS have been used to transfer a wide range of risks–from natural catastrophes to life insurance risks. ILS can be used to transfer peak risks, for example the risk of a severe natural catastrophe event or the risk of extreme mortality. The motivation for an insurance or reinsurance company to use ILS might be to tap into additional capacity offered by capital markets, or to benefit from the unique features of an ILS transaction compared to traditional reinsurance.
How does the ILS market work?
The Insurance-Linked Securities (ILS) market enables investors to take on insurance risk by purchasing securities tied to specific events, like natural disasters. Insurers issue ILS to transfer risk to capital markets, offering investors potentially high returns in exchange for the risk of losing their principal if a triggering event occurs.
The ILS market is influenced by factors such as climate change and investor demand for alternative assets, with returns typically uncorrelated to traditional financial markets. While it offers diversification benefits, the market is subject to regulatory oversight in order to maintain transparency and manage risks.
