Our investment philosophy is based on the fact that there are many excellently managed mid-sized European insurance companies who, unlike their larger counterparts, have been unable to access debt funding. New European Solvency II regulations provide a framework for subordinated debt as eligible regulatory capital making this class of capital more understandable and attractive to insurers. The result is a new opportunity to invest in subordinated debt in a stable, low risk industry.
Our strategy is to carefully select insurance companies with strong management teams, stable business franchises, robust business plans and strong balance sheets. Our professional team uses a unique combination of detailed qualitative and quantitative analyses in the process of selecting subordinated debt issuers. We have a low-medium diversification / high conviction approach to portfolio construction.
Our objective is to provide investors with a long term, yield enhanced stable income and capital preservation by careful selection of insurance companies to issue subordinated debt.
If you would like to learn more or to receive our White Paper Investing in Insurance Subordinated Debt, please contact us.
Risk Management at Insurance Regulatory Capital (IRC) begins with our assessment of where risk lies in insurance companies, how it is affected by internal and external factors and how effective the various agents of mitigation are in identifying and reducing it. We have developed extensive models which use quantitative as well as qualitative inputs in assessing the risk of both defaults and of coupon deferrals. We are not dependent on external ratings but instead carry out our own comprehensive assessment of each potential issuer as part of our asset selection process. Our Asset Selection and Pricing & Valuation Committees take these as inputs in their decision making. Once the asset has entered the portfolio we track investments carefully with information from a number of sources.