Insurance-Linked Securities (ILS)

We are a pioneer in Insurance-Linked Securities

An independent investor with a long track record

Over more than a decade, our ILS team has established itself as among the most innovative investors globally in insurance-linked investments. We offer access to the full spectrum of life and non-life ILS strategies via a range of open- and closed-ended funds as well as tailored, single investor mandates.

Our long-term purpose is to build bridges between the insurance market and the capital markets. In so doing, we can help protect the global economy against the growing risk of natural disasters, which have the potential to increase in frequency and severity as a result of climate change.

Schroders Capital has no exclusive affiliation to any insurance or reinsurance provider, ensuring we are better able to serve our clients.

Delivering returns uncorrelated to broader financial markets

We provide access to the full range of investment products associated with the risk transfer market, with the aim of delivering uncorrelated returns over the long term.

Using data science to capture risk premium

Schroders Capital has developed bespoke databases and proprietary software to help ensure robust underwriting selection and risk modelling, for example to calculate estimated financial losses caused by a natural disaster.

We take pride in our strict valuation discipline, driven by the analytic tools we have built and refined over many years investing in these markets.

Enabling better protection against the economic damage caused by natural disasters provoked by climate change

By enabling the growth of the capital available to the global insurance market, we help the insurance industry serve those seeking protection. Increased capital also helps support resilience to the growing economic risks associated with natural disasters, and the increased cost of technological threats and cyber risk.

ESG is an integral part of our investment process. We conduct ESG analysis to assess environmental and social impact, particularly as it applies to natural disasters, and we apply strict ESG selection filters.

Our leadership

With strong local footprints across the globe, our investors trust us to source what we consider the most sought-after investment opportunities.

Key Investment Risks

Volatility risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. 

Liquidity risk: There may be very limited liquidity available via the secondary market of the proposed Fund given the underlying private credit assets and investors should consider an investment only if they intend to hold it for the life of the proposed Fund. Liquidity of the underlying investments might not be sufficient to meet investor subscription and redemption requirements. 

Interest rate risk: A rise in interest rates generally causes bond prices to fall. 

Credit risk of underlying issuers/lenders: A decline in the financial health of an issuer/lender can cause the value of its bonds/ loans to fall or become worthless. 

Currency risk: The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. 

Counterparty risk: The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the proposed fund, potentially creating a partial or total loss for the proposed fund. 

Derivatives risk: A derivative may not perform as expected, and may create losses greater than the cost of the derivative.

Concentration risk: The proposed Fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund. 

Gearing risk: The proposed fund may borrow money to invest in further investments. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so. 

Valuation risk: The underlying private credit assets may be subject to inadequate pricing reliability. In addition, property-based vehicles invest in real property, the value of which is generally a matter of a valuer’s opinion. 

Industry/country risk: Legislative changes, changes in general economic conditions and increased competitive forces may affect the value of investments. Additional risks may include greater social and political uncertainty and instability and natural disasters. 

Infrastructure asset risk: Infrastructure assets expose investors to additional risks, in particular construction risk (e.g. construction delays, cost overruns, etc.) and deployment risk (e.g. capital being deployed in several instalments during construction period rather than upfront for brownfield investments).

Contact Schroders Capital
Follow us

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. All investments involve risks including the risk of possible loss of principal.