Investment oriented reinsurer best when sponsored
Wednesday, 08 09 2017, Category: Insurance and Reinsurance, Country: World
The total return reinsurance model, or investment oriented reinsurance model, or hedge fund backed reinsurance model (depending on what you prefer to call it), remains a challenging strategy to execute on well, but more recent start-ups that are sponsored by an existing re/insurer and asset manager are favoured by S&P.
Rating agency Standard & Poor’s (S&P) has repeatedly questioned the logic behind the hedge fund reinsurance business model, first questioning its viability in 2014 and then asking whether the business model had longevity in 2016.
Once again S&P is asking similar questions in 2017, but the rating agency now says that it believes that the hedge fund or asset manager supported reinsurers that are sponsored by established industry players look like the ones more likely to succeed over the longer-term.