A new commentary by Markets Group, a company that specialises in forums for institutional allocators, has highlighted how Nordic allocators are increasingly looking at insurance-linked securities (ILS) and catastrophe bonds in particular as a complement to institutional fixed income and alternatives allocations.
The commentary, authored by Kevin Gordon, a Research Manager at the firm, observes that Nordic institutional allocators are navigating a fixed income environment where traditional diversification is increasingly difficult to achieve.
“Correlations between asset classes that once provided ballast have tightened, and the search for return drivers that are genuinely independent of financial market cycles has become a strategic priority. Against this backdrop, insurance-linked securities — and catastrophe bonds in particular — are receiving serious consideration as a complement to institutional fixed income and alternatives allocations,” the commentary reads.
The commentary states that global allocators are operating in an environment defined by geopolitical instability, shifting global alliances, and the early-stage policy disruptions emanating from the United States.
FULL ORIGINAL PUBLICATION HERE