Twelve Capital and Lumyna Investments launch innovative Parametric ILS Fund
5 FEB, 2025
Twelve Capital and Lumyna Investments, a part of Generali Investments, have announced the launch of the Lumyna – Twelve Capital Parametric ILS Fund. This pioneering fund is designed to deliver diversification, enhanced returns, and de-correlated performance by investing in innovative parametric insurance transactions. The fund has secured seed capital from a leading European institutional investor, underscoring strong market confidence in its strategy.
“The partnership with Twelve Capital marks an important next step on Lumyna’s expansion in the Private Markets arena. The value-add that Lumyna brings as both manufacturer and distributor of innovative investment solutions builds on the foundations established over the past 17 years in the liquid Alts space. We are delighted to partner with such a high pedigree manager as Twelve Capital, and with market leaders Descartes and Generali, which will enable us to provide unique and differentiated access to parametric insurance to our investors.”
Philippe Lopategui, CEO of Lumyna comments:
Strategic partnerships and investment approach
The fund will collaborate closely with fintech leader Descartes Underwriting and GC&C, the Global Corporate & Commercial arm of Generali Group. This partnership leverages Generali’s underwriting excellence and highly rated insurance balance sheet, coupled with Descartes' expertise in origination and underwriting of parametric solutions. Additionally, the fund plans to allocate investments to Catastrophe Bonds (Cat Bonds) and Industry Loss Warranties (ILWs) to enhance both liquidity and diversification within the portfolio.
Twelve Capital will serve as the Investment Manager, bringing its extensive experience and deep expertise in Insurance-Linked Securities (ILS). The fund will also benefit from Lumyna's robust operational infrastructure and strong marketing capabilities, positioning it well to attract a diverse investor base.
The Growing Appeal of Parametric Insurance
Parametric insurance, which covers natural hazard risks, operates using trigger mechanisms based on independent third-party metrics, such as earthquake magnitude or wind speed. This structure allows for swift payouts, eliminating the need for complex claims management and loss adjustment processes. For investors, this translates into greater clarity and efficiency, with reduced modeling complexity focused solely on hazard triggers.
This innovative approach positions parametric insurance as a scalable and diverse investment domain, opening new opportunities for those seeking non-correlated returns and robust risk diversification. The Lumyna – Twelve Capital Parametric ILS Fund is set to capitalize on these advantages, offering a compelling proposition in the evolving landscape of insurance-linked investments.
