The “denominator effect” and investor rebalancing across asset classes has driven some of the biggest challenges for the insurance-linked securities (ILS) market in recent months, Chris Parry, Global Head of Capital Partners at RenaissanceRe, told us in our latest Artemis Live interview in March 2023. 

Chris Parry leads the third-party capital, insurance-linked securities (ILS) and joint-venture businesses at the global reinsurance company. 

He joined us in March 2023 to speak about the state of the insurance-linked securities market, the ILS investor trends he is seeing, his outlook for the rest of this year, and the strategic priorities for the RenaissanceRe Capital Partners business. 

Discussing the current state of play in ILS and third-party reinsurance capital, Parry said the market has faced its share of challenges of late. 

Parry explained that this "denominator effect" meant some large institutional investors have had to rebalance their portfolios, having become overweight to ILS and reinsurance after global asset values declined in the last year. 

This is a trend that has yet to play out fully, but Parry is also positive and his unit at RenaissanceRe has successfully raised new funds, while the multi-strategy approach of the RenRe Capital Partners platform has provided greater optionality for investors to access ILS and reinsurance returns, he believes. 

Listen to the full episode for many more insights from RenaissanceRe's Chris Parry.