PIMCO, which is owned by Allianz, has established a new property and casualty (P&C) insurance-linked securities (ILS) business, working in partnership with its parent company.
The new ILS business launch will be led by executive vice president Rick Pagnani who brings over 30 years of ILS market experience to the role, and was previously the CEO of Mt. Logan Re, the ILS division of Everest Re.
Working in partnership, PIMCO and Allianz will source global catastrophe risk in the form of collateralised reinsurance as well as other structured investments, while at the same time keeping independent underwriting and portfolio construction procedures.
According to an announcement, this approach provides PIMCO with flexibility to source risk from the open market.
Emmanuel Roman, PIMCO’s CEO, said: “We are excited to enter the ILS market at a time when volatility has become a mainstay of financial markets and clients want to diversify their investments. Partnering with Allianz will give PIMCO 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.”
Both Allianz Re and Allianz Global Corporate & Specialty (AGCS) will support the new PIMCO ILS operation, via global underwriting networks and the deal structuring capacity and experience of its Capital Solutions team.
Amer Ahmed, Allianz Re CEO, said: “We believe that this partnership of PIMCO and Allianz truly leverages the strengths of both companies. With PIMCO we have a partner with access to an investor base that can provide the capital for which Allianz can supply insurance risks, both traditional catastrophe exposure risks and over time other risk classes. At Allianz we are excited that this will enable us to expand our underwriting capacity and generate new fee-based income streams.”