The Standards Board for Alternative Investments (SBAI) has published updates to the Insurance Open Protocol (IOP), which forms part of the Open Protocol (OP) risk aggregation templates first launched in 2011 to standardise the collection and representation of risk information of investment funds for investors.
The OP is currently used by funds representing over $1.85tn in assets under management.
IOP provides a risk reporting template for Insurance Linked Strategy (ILS) funds that have a significant exposure to property catastrophe insurance risk, and has been developed to cater for the unique characteristics of property catastrophe exposure, including risk types, sources of leverage, stress tests results and side pocketing.
For practical reasons, the IOP Templates will be integrated into the broader OP Reporting framework, harmonising the data provided at the manager level, making it easier for investment managers who report data for both ILS funds and other investment funds.
The updates to the IOP template have been made in consultation with the SBAI’s ILS Working Group, which brings together leading ILS fund managers and institutional investors. The IOP is one of the many resources the SBAI ILS Working Group has developed, including guidance on valuation and side pocketing practices in insurance-linked funds. Current areas of focus of the ILS Working Group include collateral management, performance reporting, and benchmarking.
