Twelve Securis signs Taiwan distribution partners for ILS push

Twelve Securis has signed distribution partnerships with two Taiwanese firms, Concord Capital Management and Uni-President, to sell its catastrophe-bond and ILS strategies locally. Artemis first reported the agreements. They arrive as the firm widens its reach across Asia, a region its head of investment solutions, Vittorio Sangiorgio, calls a key growth avenue for the asset class.

In an interview with Artemis, Sangiorgio described an Asia best understood as several distinct markets. Australia is already mature, one of the firm's largest markets for cat bonds and ILS, with investors who know the product. Japan is more selective: interest in public cat bonds is climbing, while private ILS structures remain a tough sell, a wariness he ties to 2017. Singapore and Hong Kong sit at the other end, with family offices whose allocations are small and whose familiarity with ILS is still being built.

"The Japanese market is less keen on private ILS structures because they had maybe not the best of experiences in 2017," Sangiorgio said. "But cat bond interest is growing and increasing."

He also separates Taiwan's large institutional investors, which already hold ILS allocations, from its wealth-management channels, which are only now being introduced to the asset class. 'There has not been much commercial activity from ILS managers in this segment,' he said, adding that the barrier to entry is high. 'You need to partner with somebody locally.'

That is precisely what the Concord and Uni-President deals do. The local firms bring relationships and reach; Twelve Securis brings the fund structures and the decades of risk analysis. That split is familiar in asset management but rare in a corner of the market that has traditionally dealt with a limited circle of sophisticated buyers.

Taiwan is one expression of a broader appetite for new money across ILS. As Insurance Capital Daily has reported, Beazley is handing its Bermuda cyber fund to Integral ILS, a $3.5 billion manager, bringing an established operator into the cyber line. Aon has assembled Sidecar X, a $200 million pre-committed facility for transactional risk, using the sidecar playbook on M&A exposures. Each move is a bid to broaden the capital base of the non-life risk market, and Asia is another front.

His comments suggest the pitch to these new buyers is the standard ILS pitch: a premium for bearing a defined catastrophe risk. That has long been the appeal to insurers and pension funds, and it is the same case now being made to a Singapore family office or a Taiwanese wealth client. What differs is how much explanation is required.

Japan shows a familiar pattern. Public cat bonds are gaining ground there while private ILS remains a harder sell. He ties that to 2017, but it also makes a simpler point: a traded security with a known trigger is easier to evaluate than a customized private transaction. The same logic likely applies to Taiwan's wealth clients, so the cat bond, rather than the private ILS, is the more likely vehicle for opening Asia's newer channels.

He does not expect quick returns from the region. Family offices start from a low level, and education is part of the work. But, he added, 'we definitely see good potential there, particularly towards cat bonds.'

Nor does Twelve Securis need to convince only end clients. The Taiwan partnerships are also about building a presence with distribution firms, so that when the wealth channel matures, the manager is already a known name. That is a longer game, common in asset management entering a new region. The risk is that the market never matures, or that losses arrive before the education is complete.

The experiment will be defined by behavior under loss. Cat bonds behave like insurance: they pay well when nothing happens and take a hit when a serious hurricane lands. Japanese buyers have 2017 to remember; Taiwan's wealth clients do not, because they are new to the product. In that gap, the relationship between a local distributor and the end client becomes the deciding factor.

Twelve Securis has chosen to build that relationship before the revenue justifies it. This is a bet on patience, and on the asset class's ability to survive its own first-year storms. If it works, the next generation of ILS demand will include names that did not previously exist in the market.