Lloyd's insurer launches investment management company.
Amlin is to enter the insurance linked securities market with the launch of an investment management company.
The new venture will manage funds focused in traded insurance risk. It is intended that the company will launch its first fund in 2008.
Amlin said the venture was the first of its type to be backed by a Lloyd’s insurer. Amlin will be an investor in the fund.
The management company will be a joint venture with two traded insurance risk specialists – John Wells, who will become its chairman, and Luca Albertini, who will be its chief executive.
Wells, an investment banker, was one of the four founding members of Swiss Re Financial Products where he led the development of Swiss Re’s platform for traded insurance risk. Albertini headed the European insurance linked securities team of Swiss Re Capital Markets.
Charles Philipps, Amlin chief executive, said: “Amlin intends to be an active participant in the insurance linked securities market, both to enhance our capital and risk management capabilities and to generate returns from the growth and high margins available in this business.
“The combination of Amlin's proven reinsurance expertise with John Wells’ and Luca Albertini’s wealth of relevant capital markets experience makes the new company a strong proposition in a developing market.”
The insurance linked securities market has grown exponentially in the past few years and is an established sector within the capital markets, with more insurers and reinsurers actively participating in it.
For insurers, the capital markets have provided new sources of capital and new instruments at a time when capital and risk management have become increasingly important.
For investors, insurance related assets have provided a new asset class with a very good risk return profile, but with very low correlation to traditional equity, fixed income and real estate asset classes, as has been very clearly demonstrated during the past year.