The Healthcare of Ontario Pension Plan (HOOPP), a large Canadian institutional retirement fund, put additional capital into insurance-linked securities (ILS) in 2023, lifting its investments in the space above US $1 billion for the first time and growing them over 40% year-on-year.A year ago, HOOPP’s annual report showed that the pensions insurance and reinsurance investment fund allocations had reached C$973 million (approx.US $718.7m), up from C$721 million (approx.US $575m) at the end of 2021.

Now, at Dec 31 2023, the Canadian pension plan reports that its ILS allocation has now reached $1.366 billion, an increase of just over 40%.Which, at the reporting date, equated to US $1.03 billion, a new high for the pensions activities in the ILS market.By the end of 2023, HOOPP’s overall pension assets stood at C$112.6 billion, up 9% over the previous year.

Which means the ILS allocation grew much faster than the overall pension fund.But of course, with 2023 a particularly strong year for ILS market returns, a component of the 40% growth will likely be retained earnings generated over the year from the reinsurance focused portfolio of investments.The Healthcare of Ontario Pension Plan (HOOPP) began its allocations to insurance-linked securities (ILS) in late 2019, largely via insurance-linked funds, as well as some direct investments into other reinsurance-related securities.

..In terms of size, HOOPP’s ILS allocation had reached roughly C$260 million in size at the end of 2019, before 2020 saw HOOPP growing the ILS investment program, .

In 2021, HOOPP further expanded the ILS strategy, , representing growth of just over 31% in Canadian dollars.2022 saw additional growth in the ILS allocation at a time when HOOPP’s overall net assets shrank somewhat, so in 2022, it meant the pension ended that year with its ILS investments nearing a 1% share of its total portfolio size.Now, after a further 40% in size of the ILS allocation, HOOPP’s ILS investments now constitute 1.21% of its overall assets, as of the end of 2023 reporting date.

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