AIG’s AlphaCat assets under management fall to $3.5bn

AIG’s AlphaCat assets under management fall to $3.5bn

Assets under management at American International Groups (AIG) insurance-linked securities and collateralized reinsurance dedicated ILS investment supervisor entity, AlphaCat Managers, have fallen to $3.5 billion by the end of the third-quarter, with some effects from the quarters catastrophes clear in its reporting.Like the rest of the insurance-linked securities (ILS) market, AlphaCat Managers has actually felt the effects of major global catastrophe loss occasions during the duration, especially the European flooding and hurricane Ida.
Insurance-linked securities (ILS) possessions under management at AlphaCat Managers had reached $4.2 billion at December 31st 2020, however then was up to $3.8 billion by March 31st 2021, with first-quarter catastrophe loss activity, particularly the US winter storms, expected one chauffeur of that fall.
At the half-year, AIG did not report any figures for AlphaCat Managers, however now at the end of Q3 2021 the information is back and AIG reported that ILS possessions under management was up to $3.5 billion by the end of September.
Of the $3.5 billion of assets under management at September 30th 2021, $3.4 billion was from third-party investors.
Its safe to assume disaster loss activity is one essential driver of this decline, provided the magnitude of the major loss activity and how it has actually struck other ILS investment management units.
Its also apparent in the documented income that AIG has actually earned from AlphaCat Managers during the duration, with investment income from the ILS activities erased in the quarter and a direct financial investment loss reported.
For Q3 2021 AIG reports that AlphaCat investment income was zero, below $6m in Q2, -$7m in the loss struck Q1, $15m in Q4 2020 and $9m in the prior-year comparable quarter of Q3 2020.
This investment income figure is made up of asset management cost income and earnings or loss from direct investment activities, that AIG makes from the AlphaCat ILS operations.
Fee income stayed robust in Q3 2021, at $7 million, which was greater than the previous two quarters. But the loss from direct financial investment activities, signalling losses suffered by the AlphaCat ILS methods, was -$7 million, so wiped out any fee income gains for the period.
Its noteworthy though that the loss from direct investment activities was much greater after Q1 and the United States winter storms, at -$13 million, so it seems that by the end of Q3 the events in the duration had really affected AlphaCat less, which could be a reflection of AIGs own threat exposure to winter season storm Uri, because of the way the insurance company leverages AlphaCat in sharing in its risks.
Moving forwards, the focus for AlphaCat and AIG will be on building the very best portfolio it can for 1/1, at the finest reinsurance and retro rates possible, while additional incorporating making use of third-party capital into its wider insurance coverage and reinsurance business.

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