The broadly diversified portfolio of insurance-linked securities (ILS) and reinsurance investments managed by pension investment firm PGGM on behalf of end-client the Dutch pension PFZW, delivered a 5.8% return for the third-quarter, lifting year-to-date returns to 11.7%.At the same time, the latest assets under management of what is the largest single investor ILS allocation in the market ended September at around the US $8.6 billion level.In Euros, the insurance portfolio managed by PGGM for PFZW stood at €7.685 billion at September 30th, which is just very slightly down on .Returns were strong in the third-quarter, with the 5.80% performance of the PGGM / PFZW portfolio of catastrophe bonds, insurance-linked securities (ILS) and other reinsurance investments beating the 5.5% return that had been reported for the first-half of this year.

Which takes the ILS portfolio return for the year to end of September 2024 to 11.7%.It’s worth noting that the target return for the ILS portfolio is 4% above the risk-free rate, which in 2024 is once again being well exceeded.For comparison, the return performance of the ILS portfolio through the first three-quarters of 2023 was 11.80%, while for 2022 it was -3.1%, and 2021 -1.5%.

At the size reported at the end of September, the ILS portfolio managed by PGGM for its pension fund client PFZW made up 3% of its total net invested assets, which stood at €254.6 billion, up from €240.5 billion at the mid-year.The ILS portfolio accounted for 3.2% of PFZW’s net assets at the end of the first-half, so it has slipped slightly below the target, which was set at 3.2% as of the mid-year point, even while the overall assets of the client pension PFZW have been growing.It’s important to note that currency effects can make a relatively significant difference there and the ILS portfolio has been relatively stable, albeit with some changes to allocation mix.

As we reported yesterday, a new reinsurance investment partner has been added, .We assume that it might be included in the latest end of Q3 figures, which would still give PGGM and PFZW a little more headroom to expand the ILS portfolio back up to the 3.2% of assets target.As we also reported this week, , so that is a potential area of future expansion.

PGGM remains the largest single investor listed in ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.