Insurance-Linked Securities

An expert approach to accessing risk

An independent ILS manager with world-leading capabilities

Schroders Capital ILS provides the full spectrum of life and non-life ILS strategies for investors, offering a wide range of funds, as well as tailored mandates, in this dynamic and growing asset class.  

 Our team combines deep expertise in insurance markets with unique scientific acumen and knowledge in underlying hazard risks. Backed by our proprietary modelling and top-tier actuarial analysis, we give investors access to pure insurance risk, delivering long-term returns characterized by their decorrelation from broader financial markets.  

 Through supplying the insurance market with necessary risk-bearing capital, our ILS products further serve the important purpose of building societal resilience to disasters.  

Shape “Insurance-Linked Securities are a conduit through which capital markets can help to bear risks which insurance markets can’t absorb alone. This represents an enormous opportunity, with a tangible social benefit.”

Stephan Ruoff

Co-Head of Private Debt and Credit Alternatives

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We believe integrating ESG considerations into our investments creates more resilient assets supporting financial returns. We aim to determine ways our portfolio can reduce impact on the environment and enhance social benefits for our tenants and surrounding communities. We have made a Net Zero Carbon Commitment and our Pathway is available here.

ILS case study

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

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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).