Investors are increasingly focused on understanding how climate change could affect Insurance Securities Portfolios (ILS) and the work being done by investment managers to understand that, with many taking the time to “come back to the table” , according to Frank Fischer of Aeolus Capital Management.
Speaking to us in a recent Artemis Live video interview in which we discussed Aeolus’ climate risk research program and how it plays into investment decision-making within the company, Fischer provided insight into how investors are engaging with the topic of climate change risk.
Frank Fischer, Chief Analytics Officer and Dr. Pete Dailey, Head of Research, both of insurance securities manager (ILS) and reinsurance investment manager Aeolus Capital Management, recently joined us for this interview.
Commenting on how focused investors are on climate risk and the work their investment manager is undertaking to better understand this, Fischer said: “They realize that we have invested heavily in research and understanding climate and we are perhaps the people who know and seek him, more than anyone.
“On climate change in particular, I think what we’re seeing now is that investors are more willing to take the time to come back to the table, and really understand and dig deeper into the managers, and how they’re leveraging the research and what they do to try to get the right answer,” he continued.
The main question investors ask is whether research is really used in risk selection and portfolio management, Fischer also told us.
Dailey explained to this: “The good news for our investors is that with an explicit search function, Aeolus’ risk view will be evaluated every year and will take into account the very latest data, the latest information on events of the previous seasons and the evolution of the climate. science.”
“We try to deliver the insights to our investors in what we like to call a multidimensional understanding of climate risk,” Dailey added. Say, “We want to provide different facets of research, but also in different formats, that make it easier for our investors to consume. »
“Things can fluctuate in the industry over time, but, you know, the constant will be that climate is an important part of many models, regions and perils around the world and you have to keep improving,” commented Fisher.
Saying that, “You need to keep researching, to make sure you stay on top of the changes and implement them in your pricing.”
The entire video interview is embedded below and can also be viewed in full, along with previous Artemis Live video interviews, on our YouTube channel.
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