1927 - 1928 all over again. Partaaay!*
From Artemis, Jan 24:
Asset management giant PIMCO (Pacific Investment Management Company LLC) and owner Allianz S.E. are set to partner on a new insurance-linked securities (ILS) operation, which as we revealed recently is set to be run by Rick Pagnani.
PIMCO is a world leading fixed income investor with a huge $1.72 trillion of assets under management, with access to an investor base the likes of which has not been unleashed on the ILS market before.
Allianz, meanwhile, is one of the largest insurance and reinsurance companies on the planet, with access to risk that is as good as any other underwriting house and an ability to originate risks for the pairs ILS investment initiative.
PIMCO said today that ILS is a “strategically important asset class for PIMCO’s broader alternatives platform,” a platform with more than $34 billion of assets under management currently.
PIMCO also revealed today that the ILS operations will be a partnership with re/insurer Allianz, with the company set to source global catastrophe risk in the form of collateralized reinsurance and other structured ILS investments for PIMCO’s investment strategies.
The firms said they will maintain independent underwriting and portfolio construction procedures, saying that this approach which they call differentiated will give the asset manager PIMCO “the flexibility to source risk from the open market in an effort to deliver attractive risk-adjusted returns for clients.”
“We are excited to enter the insurance-linked securities market at a time when volatility has become a mainstay of financial markets and clients want to diversify their investments,” commented Emmanuel Roman, PIMCO’s Chief Executive Officer. “Partnering with Allianz will give PIMCO access to a diversified portfolio of global catastrophe risk and the ability to leverage the robust capabilities of a premier global insurance group in our effort to deliver attractive risk-adjusted returns for clients.”
“We believe that this partnership of PIMCO and Allianz truly leverages the strengths of both companies,” added Amer Ahmed, CEO of Allianz Re. “With PIMCO we have a partner with access to an investor base that can provide the capital for which Allianz can supply insurance risks, both traditional catastrophe exposure risks and over time other risk classes. At Allianz we are excited that this will enable us to expand our underwriting capacity and generate new fee-based income streams.”
The pair said that, alongside Allianz Re, Allianz Group’s corporate insurance carrier Allianz Global Corporate & Specialty will also support the PIMCO ILS business.*Some day I'll have to tell that story.
It will achieve this by providing access to its international underwriting network, as well as the deal structuring capabilities of its Capital Solutions team, a team that is already very experienced in working with ILS funds and investors.
Hence the PIMCO ILS business will have broad access not just to reinsurance or retrocession transactions, but also to placing its investor capital behind pools of primary risks it seems....MORE
