Insurance-linked strategies

Insurance-linked strategies cover a wide range of investments, all of which are based on an underlying with some form of insurance-related risk, e.g.:

Life (UK Traded Endowment Polices (TEPs))

Natural Catastrophies: (products: catastrophy (or CAT) bonds, weather derivatives)

Various other (product examples: industry loss warranties, sidecar re-insurance)

What is common to all of those strategies is that the investment returns are with the exceptions of TEPs uncorrelated to capital markets (in the case of TEPs there is a low correlation present). As most investros increasingly look for sources of uncorrelated return, even is this means to be exposed to potentially less liquidity and unfamiliar risks, insurance-linked strategies have recently gained in popularity.

PDL International currently offers strategies and products based on UK Traded Endowment Policies.

At the core of PDL International’s offering are insurance-linked strategies. Those types of investments typically include some sort of guarantee at the level of the underlying which means that investors benefit from lower volatility and capital drawdown. Insurance-linked strategies also offer lower or no correlation to capital markets – another major benefit in today’s uncertain world.