As natural disasters become more frequent causing significant losses, it is now an important societal issue. While economic losses are covered through insurance, large scale losses could overwhelm insurers and reinsurers beyond their capacity. The need to alleviate this risk developed in to what is now known as the Insurance linked securities market, also represented by CAT bonds.
Unlike traditional reinsurance, Insurance Linked Securities played an innovative role in merging the insurance market to capital markets, with the following benefits.
Insurance linked securities provide societal benefits in lower renewal rates and wider coverage (Disaster finance, and closure of coverage gap).
From an investor perspective, low correlation to traditional equity and bonds provide diversification benefits to the portfolio. In addition, insusceptibility to a volatile economic and interest rate environment makes it an attractive source of return.
Eastpoint, based in the reinsurance center of the British overseas territory of Bermuda, supports clients by providing a stable return for the mid to long term, through its asset management and consulting business specializing in insurance linked securities.
Main Business: Investment Management (Bermuda Registration No. 46744)