SBAI Publishes Updated Insurance Open Protocol
The Standards Board for Alternative Investments has published an update to the organisation's Insurance Open Protocol.
The IOP forms part of the Open Protocol risk aggregation template which was first launched in 2011 to standardise the collection and representation of risk information of investment funds for investors. The SBAI says that the Open Protocol is currently used by funds representing over US$2tn in assets under management.
The IOP provides a risk reporting template for funds that have significant exposure to property catastrophe insurance risk. It has been developed to cater for the unique characteristics of property catastrophe exposure – including risk types, sources of leverage, stress test results, and side pocketing.
“IOP’s risk reporting has been revised to capture more aspects of the risk of property catastrophe insurance funds. It will improve the ability of investors to compare information between funds and to create a portfolio view of multiple funds. It is worth noting that IOP has materially benefitted from the input of managers and others in the SBAI ILS Working Group," said Michael Hamer, Partner and Senior Investment Analyst at Investment consulting firm Albourne Partners, which is Co-Chair of the OP Working Group.
“(Insurance) Open Protocol helps streamline the reporting process and enable better transparency. This ultimately fosters resilience and a more secure operational environment that strengthens confidence for our investors," said François Delattre, Head of Analytics at Tangency Capital.
“Better risk disclosure is a priority for investors and regulators alike. As a standardised template, (Insurance) Open Protocol ensures consistency, comparability, and clarity across funds to enable transparency and facilitate effective risk management," added Thomas Deinet, Executive Director at the SBAI.
Changes to the IOP template have been made in consultation with the SBAI’s ILS Working Group; other areas of work coming from the SBAI ILS Working Group has included guidance on valuation and side pocketing practices in insurance-linked funds.
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