Swiss Re, through its subsidiary Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC), will take on the role of co-investment manager for GAM's insurance-linked security (ILS) fund range. This appointment includes the GAM Star Cat Bond UCITS Fund and is set to be effective from May 7, 2025.
As of March 31, 2025, Swiss Re manages around USD 5 billion in ILS assets. From May 7, they will also co-manage GAM's ILS funds, which have a total of approximately USD 3 billion in assets under management as of the same date. Swiss Re will handle investment and portfolio management decisions while GAM will oversee risk management and lead global distribution and product structuring. Both companies plan to collaborate on innovation within the ILS sector.
Swiss Re Group has been a significant player in reinsurance and insurance-based risk transfer for over 160 years. It has been involved in catastrophe bonds since their inception in the 1990s, acting as a leading sponsor and arranger with transactions totaling about USD 50 billion.
Investors in GAM's cat bond and ILS funds are expected to benefit from Swiss Re's extensive expertise in risk assessment and underwriting. This includes more than 50 scientists focused on catastrophe risk, over 190 proprietary peril models, and around 200 terabytes of curated data.
The funds will be co-managed by SRILIAC, a subsidiary registered with the US Securities and Exchange Commission. Mariagiovanna Guatteri leads this unit with over two decades of experience in cat bond portfolio management at Swiss Re.
Mariagiovanna Guatteri commented: "The ILS market set new records in 2024, and strong returns on cat bonds have highlighted the attractiveness and diversification value of the asset class for investors."
Catastrophe bonds provide financial protection against potential losses from natural catastrophes or other perils. They offer investors access to an asset class whose returns show low correlation with other financial markets.
Christopher Minter, Head of Swiss Re Alternative Capital Partners, stated: "We are delighted to partner with GAM to co-manage their cat bond and ILS investment strategies."
The demand for such bonds continues to grow due to economic development, concentration of insured values in exposed areas, changing vulnerability factors, and climate change impacts.