Press Releases: The STORM Interview - Providing a Choice
The STORM Interview - Providing a Choice
Philip Lotz, CEO and Chairman of Juniperus Capital, answers STORM's questions
Q: Which sector of the synthetic transfer of risk markets is your firm primarily involved
with?
A: We are a fund that invests in predominantly property cat risk through collateralised reinsurance contracts. We do not invest in any life risk, only non-life.
Q: When, how and why did you/your firm become involved in the sector?
A: We were originally sponsored by Benfield, now Aon Benfield, who was also the seed investor and were officially funded on 1 June 2008. Benfield felt that there was enough demand across its client base for a new way to invest in insurance risk. The thinking was that there was an opportunity to tap demand geared towards collateralised reinsurance, as opposed to pure cat bonds.
Q: In your view, what has been the most significant development in the markets you cover in recent years?
A: The most significant event is the financial crisis.
Q: How has this affected your business?
A: Ultimately the financial crisis will reinforce the notion that an investment in insurance risk is highly "un" correlated to the traditional financial markets. The past year has shown that the less you had to deal with the capital markets, the better off you were.
This will lead to continued growth in the desire to have some percentage of a professionally managed portfolio dedicated to insurance risk. We are already seeing this in our most recent meetings with investors. As investors recover, many are not getting mandates for AI, but are getting mandates to invest in insurance.
This continued interest in the asset class, plus our good returns, has helped us steadily raise AUM throughout the crisis and we continue to see interest for our fund.
Q: What are your key areas of focus today?
A: A: In terms of running the business, we're in fund raising mode. It's a particularly important time of the year for us to be fund raising because during the autumn people start to turn their attention to their investments for the end of the year and the January renewals.
It's still the wind season so, although there are some transactions going through, it tends to be a bit quieter at this time of the year and so it's a good time to focus on fund raising. At the same time, we're putting the money we raise to work in the opportunities that are available ? we continue to see opportunities that meet our thresholds.
Q: What is your strategy going forward?
A: Our strategy is to remain focused on UNL and property cat risk; it suits the structure of the business. It's a good strategy because it allows us to offer investors an attractive portfolio with a well balanced risk/reward profile.
Q: What major developments do you need/expect from the market in the future?
A: There is a lot of discussion around tax and regulatory issues at the moment, but I don't think any of this will affect us particularly ? we're pretty happy with our set-up. We keep our ear to the ground about any market changes and our structure should be fine.
Our biggest desire is to see more demand for investing into insurance risk. But, as we continue to hit our returns, that should speak for itself and make us attractive to the market.
Q: Which sector of the synthetic transfer of risk markets is your firm primarily involved
with?
A: We are a fund that invests in predominantly property cat risk through collateralised reinsurance contracts. We do not invest in any life risk, only non-life.
Q: When, how and why did you/your firm become involved in the sector?
A: We were originally sponsored by Benfield, now Aon Benfield, who was also the seed investor and were officially funded on 1 June 2008. Benfield felt that there was enough demand across its client base for a new way to invest in insurance risk. The thinking was that there was an opportunity to tap demand geared towards collateralised reinsurance, as opposed to pure cat bonds.
Q: In your view, what has been the most significant development in the markets you cover in recent years?
A: The most significant event is the financial crisis.
Q: How has this affected your business?
A: Ultimately the financial crisis will reinforce the notion that an investment in insurance risk is highly "un" correlated to the traditional financial markets. The past year has shown that the less you had to deal with the capital markets, the better off you were.
This will lead to continued growth in the desire to have some percentage of a professionally managed portfolio dedicated to insurance risk. We are already seeing this in our most recent meetings with investors. As investors recover, many are not getting mandates for AI, but are getting mandates to invest in insurance.
This continued interest in the asset class, plus our good returns, has helped us steadily raise AUM throughout the crisis and we continue to see interest for our fund.
Q: What are your key areas of focus today?
A: A: In terms of running the business, we're in fund raising mode. It's a particularly important time of the year for us to be fund raising because during the autumn people start to turn their attention to their investments for the end of the year and the January renewals.
It's still the wind season so, although there are some transactions going through, it tends to be a bit quieter at this time of the year and so it's a good time to focus on fund raising. At the same time, we're putting the money we raise to work in the opportunities that are available ? we continue to see opportunities that meet our thresholds.
Q: What is your strategy going forward?
A: Our strategy is to remain focused on UNL and property cat risk; it suits the structure of the business. It's a good strategy because it allows us to offer investors an attractive portfolio with a well balanced risk/reward profile.
Q: What major developments do you need/expect from the market in the future?
A: There is a lot of discussion around tax and regulatory issues at the moment, but I don't think any of this will affect us particularly ? we're pretty happy with our set-up. We keep our ear to the ground about any market changes and our structure should be fine.
Our biggest desire is to see more demand for investing into insurance risk. But, as we continue to hit our returns, that should speak for itself and make us attractive to the market.
