PPGM Considers Increasing Disaster Insurance Exposure

Dutch fund’s ILS class experienced 7% annual returns, senior investment manager reveals.

The $248 billion Dutch pension fund manager PPGM seeks to boost its presence in insurance-linked securities (ILS), otherwise known as disaster insurance, Reuters reports.

A rocky year for the environment, 2017 saw a swath of hurricanes leveling the globe and weakening capital among insurers. PPGM’s main client, Dutch healthcare pension PFZW, reportedly lost roughly 2% on ILS investments, citing the seismic hurricane season for its troubles.

In an interview with Reuters, PPGM’s senior investment manager for ILS, Evelien Takken, admitted ILS had returned 7% annually for the fund, declaring now to be the time to increase allocations in the class. Takken would reportedly prefer PPGM raise allocations slightly, from roughly 2% of assets under management to about 2.5%.

“For next year, there’s no increased hurricane activity expected, (but)…you’re rewarded with a better premium for similar risks,” she told Reuters, admitting that while there is currently no target date specified for PPGM to reach that 2.5% in ILS assets, the best year to begin acquiring more disaster insurance is the one following such events.

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