Deals
Pensions Muscle Into Reinsurance for Yield in Catastrophe Wagers
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The $30 trillion global pension fund industry is starting to muscle in on traditional reinsurers, financing protection against earthquakes and tornadoes as interest rates near record lows spur the search for yield.
A record $10 billion of institutional money flowed into insurance-linked investments in the 18 months through June, and for the first time is directly influencing pricing of some catastrophe risk coverage, according to Guy Carpenter, the reinsurance brokerage of Marsh & McLennan Cos. Catastrophe bonds can yield as much as 15 percent, LGT Capital Partners AG says.