With Florida Retirement System pension plans managing more than $912 million in insurance-linked securities (ILS) and related assets by the end of 2022, institutional investors continue to diversify their insurance and reinsurance investments thanks to longevity-linked life Asset growth.
In fact, life insurance was the only segment of Florida Retirement System’s pension plan insurance and reinsurance-related portfolio that saw growth at least in the last year.
Pensions, along with other investments in ILS and reinsurance, primarily focused on catastrophe risk and casualties, all shrunk again in 2022, with losses reported on every distribution, with Hurricane Ian likely a significant driver of this decline.
The Florida Retirement System Pension Plan is the fifth largest pension fund in the United States, with approximately $180 billion in assets under management.
The Florida Executive Board manages pension plan assets and has been distributing ILS and reinsurance-related investments since 2017.
The pension plan began its ILS investments, allocated to Rubik Holdings, a vehicle of Nephila Capital, and the management structure of RenaissanceRe called Tintoretto Partners, LP, a Delaware-based reinsurance investment fund vehicle.
Together, the two grants totaled $117.5 million through mid-2018.
During the following year, the Florida Retirement System pension plan increased distributions to the Property Catastrophe Keystone PF Fund operated by Aeolus Capital Management, the Juniperus Insurance Opportunity Fund operated by Pillar Capital Management, and the Casualty Breakout ILS Property & Casualty Fund II, The latter is associated with Credit Suisse and associate advisor ILS Investment Management (ILSIM).
At the same time, the Florida Pension has significantly increased its deployment of the Nephila-managed Rubik vehicle and the RenRe-managed Tintoretto.
As a result, Florida pension funds booked more than $661 million in ILS assets in their portfolios by mid-2019.
Allocations to Aeolus increased in 2020, with further allocations to RenRe’s Tintoretto and, for the first time, life insurance settlement funds and Miravest added as pensions look to diversify across insurance and reinsurance.
As of June 30, 2020, Florida Retirement System pension plans had more than $837 million in insurance-related investments, of which nearly $772 million was focused on property and casualty insurance, primarily property catastrophe reinsurance and retrocession.
In 2021, the allocation of Pillar Capital Juniperus has increased again, and the size has grown to more than 250 million US dollars, while the allocation of Aeolus and RenRe Tintoretto also seems to be slightly supplemented, and the Miravest life settlement strategy also has new capital growth injections.
Pensions’ overall ILS and insurance-related investments approached the billion-dollar mark for the first time by June 30, 2021, at nearly $968 million, of which more than $862 million was related to P&C insurance and reinsurance.
Allocations to casualty ILS runoff funds continue to shrink post-shutdown during the next year through the midpoint of 2022, while all catastrophe reinsurance and retroactive risk strategies post losses during the period, but Florida Pension continues to expand its life insurance Interest, second distribution to another fund managed by Miravest.
By the end of June 2022, Florida Retirement System pension plans calculated overall ILS and insurance-related assets of $961.1 million, of which $809 million came from catastrophe reinsurance and retroactive strategies (Aeolus, Nephila, Pillar, RenRe), while life insurance settlements The portion grew to $152 million.
The latest data we have available shows the net asset value per ILS allocation by the end of 2022, showing a roughly 5% decline in overall assets as of the second half of last year.
The overall value of ILS and insurance-related assets fell to just under $912.4 million, of which nearly $746 million was related to property and casualty, also a major catastrophe risk.
These catastrophe reinsurance-focused strategies contract the most, with an overall decline of about 8% in the second half of 2022.
ILS investments, at just over $912 million, continue to account for approximately 0.5 percent of the $180 billion in assets managed by the Florida Executive Board for the Florida Retirement System pension plan.
We also learned that new life insurance allocations to the Miravest ILS Credit Opportunities II LP fun appear likely to increase as we understand the commitment to it is $150 million in installments.
The Florida Retirement System is just one of many pension funds and major ILS investors we track in our directory here.