Pimco launches insurance‑linked securities business

Pimco launches insurance‑linked securities business

Pimco has hired Rick Pagnani, executive vice president, to lead the launch of the firm's property and casualty insurance-linked securities (ILS) business.

The insurance-linked market, which offers low correlation to other asset classes and limited sensitivity to moves in interest rates, is a strategically important asset class for Pimco's broader alternatives platform, with more than $34bn of assets under management.

Pimco will work in partnership with its parent, Allianz, to source global catastrophe risk in the form of collateralized reinsurance and other structured investments, while maintaining independent underwriting and portfolio construction procedures. 

This differentiated approach will also give Pimco the flexibility to source risk from the open market in an effort to deliver attractive risk-adjusted returns for clients.

"We are excited to enter the insurance-linked securities market at a time when volatility has become a mainstay of financial markets and clients want to diversify their investments," said Emmanuel Roman, Pimco's chief executive officer. "Partnering with Allianz will give us access to a diversified portfolio of global catastrophe risk and the ability to leverage the robust capabilities of a premier global insurance group in our effort to deliver attractive risk-adjusted returns for clients."

Together with Allianz Re, Allianz Group's corporate insurance carrier Allianz Global Corporate & Specialty will support the Pimco ILS business through access to its international underwriting network and the deal structuring capabilities of its Capital Solutions team.

Pagnani, who has more than 30 years of experience in the insurance-linked securities market, will lead a group of dedicated professionals and incorporate robust underwriting and risk management tools for the business. He will report to Nic Johnson, managing director and portfolio manager.  Prior to joining Pimco, he was the chief executive officer of Mt. Logan Re where he launched the third-party ILS investment business of Everest Reinsurance. Prior to joining Everest in 2012, Pagnani was partner at TigerRisk Partners and chief executive officer of Ascendant Reinsurance.