AP2, or Andra AP-fonden, a Swedish state pension fund that is one of the largest in Europe at SEK 459 billion under management, saw its insurance-linked securities (ILS) allocation rise in value to around US $1.1 billion by the end of 2024, with the ILS asset class exceeding its long-term return expectations last year.
AP2 has been allocating to catastrophe bonds and ILS in private reinsurance form since at least 2012 and its allocation has been growing in value over-time, as returns compound.
At the end of 2023, the AP2 ILS allocation stood at around the US $920 million mark and the pension fund had expanded its allocation that year, to capitalise on rising reinsurance premiums and cat bond spreads after hurricane Ian.
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