In the wake of its announcement that Swiss Re is bringing together its insurance-linked securities (ILS) investment management operations under the Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC) brand, Artemis spoke with senior executives from the Alternative Capital Partners (ACP) division of the reinsurance company.
In our interview they explained that Swiss Re sees alternative capital as a piece of the reinsurance capital stack that is only going to become more relevant over time.
To begin we discussed yesterday’s announcement of the merging of the two ILS management units, which sees Mariagiovanna Guatteri taking on responsibility for the combined ILS investment manager operations of Swiss Re.
On what the change means, Guatteri told us, “I think going forwards there’s going to be a positive impact for investors, because you can imagine one platform with several strategies is much easier to deal with from an investor side, compared to multiple platforms with the same number of strategies.
“There is a single entry point, and investors can then access different strategies, or a combination of different strategies. It simplifies the access from the investor point of view, but the fundamental strategy doesn’t change.”
Minter added that, “It is also about streamlining and ensuring we’ve got the most efficient platform, both from a cost perspective, but also from an internal information flow perspective.
“On a day-to-day basis, investors shouldn’t really notice a difference. This is the fund that’s managed currently by SRILIM, and will shortly be managed by SRILIAC; it effectively takes a quota share of nat cat risk from Swiss Re, and it will continue to do that on the same basis going forward.”
During our interview we also discussed the partnership with asset manager GAM which was announced back in April 2025 and sees Swiss Re taking on co-portfolio management duties for the GAM Star Cat Bond Fund UCITS strategy, while also collaborating on other opportunities.
Guatteri explained, “That’s been working out very well. From a portfolio management side, things are running very smoothly. It has made us a little bit bigger in the market; a bit more of a heavy weight, which doesn’t hurt. The portfolio is performing as expected.
“Also on the investor side, relationships are becoming very strong. Clearly, you go through changes, there are a lot of meetings, you need to present yourself and explain what you’re doing. But now we’re in a phase of growth and there is a positive outlook; personally I have a very optimistic outlook. We’re still in the middle of hurricane season so there is usually little activity on the investor side. But I see this world really expanding.”
Minter provided some more context, “Taking over as co-manager of the GAM fund is very different to the internal changes which we announced yesterday, because there was a change of manager from one firm to another; it’s not just a legal entity change. Inevitably, some institutional investors will have policies which require them to redeem or to consider redeeming immediately.
“So, we saw outflows of AUM in the immediate weeks following that announcement, as expected. But the great thing is that we’re seeing investors come back and engage with us to undertake due diligence. So, there’s a very positive atmosphere there and on a personal level, we really like working with the GAM team and the individuals there. It just seemed to gel very well.”
While the collaboration with GAM continues and new product development is part of that, Minter also told us it remains early days, saying, “There’s nothing we’re ready to announce, but there’s progress to the extent that we are actively discussing that.”
We moved on to explore the broader Swiss Re Alternative Capital Partners (ACP) strategy in the ILS market and how important this has become.
Minter explained, “There is a lot of focus on alternative capital across the firm. It’s a pool of capital that the firm is closely monitoring because its development is a driver in the way that the reinsurance industry develops. We need, from our perspective, strategically, to be involved in the market and be participants in the market. Both the GAM transaction, which gave us access to broader distribution, and on day one, a significant pool of assets under management, and the announcement around the streamlining of our ILS asset management operation speak to the commitment the firm has to this asset class, to this risk class.”
Guatteri added, “From my vantage point, this clearly shows that for Swiss Re this is a very strategic piece of business. As you know, Swiss Re is an investor in this asset class. So, there is clear alignment of interest from all angles. The team gets the support and it’s an important part of the overall market. I think it’s important that global reinsurance companies like Swiss Re recognise that and use it as a strategic piece of their business.”
On the future role of alternative capital within the reinsurance market in general, Minter further stated a very positive view, “Nobody has a crystal ball and can project with a high degree of accuracy how the interaction of alternative capital and traditional reinsurance balance sheets are going to develop.
“But fundamentally, I think it behoves a major reinsurer to be an active participant in alternative capital, or alternative pools of capital, rather than ignore it or even hope it goes away. Because it’s here to stay, in one form or another, and it’s not going to become less relevant.
“It’s only going to become more relevant. From my perspective, I think it’s going to be significantly more relevant.”
Beginning to look to the future, we discussed the potential for product innovation within ACP and Swiss Re’s ILS management units, which is an area of focus for the leaders as they look to leverage the broad expertise and access to risk that comes as being part of a global industry giant.
“With one platform, you can imagine some new product creation. We’re very well positioned now to play in the liquid market, in the less liquid market, and with a platform that is very differentiated from other market players. So, being part of the Swiss Re platform really facilitates that. And again, with a simplified platform for ILS investment management, it simplifies things even further,” Guatteri said. “So, we can start with relatively straightforward new products, but then it’s just building from that and being creative, but always maintaining the focus on high quality products for investors.”
Minter provided his views on casualty insurance-linked securities (ILS), an area of the market coming in for increasing focus at this time.
“We are looking closely at how several innovators in the space are taking on casualty risk in conjunction with some less liquid asset strategies. But, I think, if we were to launch any more long-tail risk-oriented product, we would need to be ourselves very, very comfortable that the risk profile would work for a typical institutional investor,” he explained.
But stressed that, when it comes to casualty ILS, “You must be very measured. If you are a responsible market participant, one should be very cautious in terms of developing these casualty risk transfer options. It’s important that there is complete alignment on the part of both the liability originator and the asset allocator.”
Growing the ILS and alternative capital activities at Swiss Re is a focus for the two executives, seeing an opportunity to develop broader partnerships with investors and deliver efficient access to risk sourced through the wider group.
Guatteri told us, “Historically, as you know, I’ve been managing cat bond strategies and here there is definitely excellent opportunity for growth. The cat bond market has been growing tremendously, and we expect more to come. The other opportunity comes from leveraging this unified platform for new products.
“So, the next 12 months is really about growth in our traditional and cat bond strategies, while also focusing on new products as well. Solidification and growth, that’s the focus.”
Minter added that, “Our ambition is to grow meaningfully on the sell-side, on the ILS business. We’re looking for some innovation there, alongside some of the innovation on the buy-side, on the asset management side.
“I would expect us over the next two to three years to be net hirers. We have a very good core team, but as we grow the business, we will need to increase staffing levels at both a junior and a senior level.”
Finally, the pair explained why they feel operating an ILS and alternative capital business within a large and diversified global reinsurance firm like Swiss Re can deliver benefits.
Minter said that, “I think it is more efficient because you just got instantaneous access to a huge number of data sets.
“But the bigger advantage is not just for cost efficiency, but the value of the knowledge, the accrued knowledge across hundreds and hundreds of people that can feed into our ILS strategies, which we think gives us a significant edge.”
While Guatteri further explained, “Swiss Re hugely values risk knowledge and has been investing further in the Cat Perils team. That’s something that is fully accessible to us, and it’s a great input to everything we do that involves risk selection and hard to replicate for independent ILS managers.”
Read all of our interviews with ILS market and reinsurance sector professionals here.
