Twelve Capital and Lumyna Investments, part of Generali Investments, have launched a new parametric insurance-linked securities (ILS) fund – Twelve Capital Parametric ILS Fund – backed by a leading European institutional investor.
According to a press statement, the new fund aims to offer investors “diversification, enhanced returns, and de-correlated performance by investing in cutting-edge parametric insurance transactions”.
The fund will collaborate with Descartes Underwriting, a fintech specialist in parametric insurance, and Generali’s Global Corporate & Commercial (GC&C) arm, which provides parametric solutions backed by Generali’s underwriting expertise and highly rated balance sheet. In addition to parametric transactions, the fund will also allocate capital to Cat Bonds and Industry Loss Warranties (ILWs) to further enhance liquidity and diversification.
Twelve Capital will serve as the fund’s investment manager, leveraging its deep expertise in the ILS market, while Lumyna will provide the fund’s operational infrastructure and distribution capabilities.
Parametric insurance, which covers natural hazard risks, is structured around predefined trigger mechanisms — such as earthquake magnitude or wind speed — based on independent third-party data. This approach allows for swift payouts without the delays associated with traditional claims processing, while also reducing costs linked to loss adjustment and claim management.
According to Dr Rom Aviv, ILS Senior Advisor to Twelve Capital, parametric insurance provides a premium for its simplicity, offering investors increased internal rate of return by minimising trapped capital risks.
The launch of the new fund aligns with Lumyna’s broader strategy to expand its footprint in private markets.
Philippe Lopategui, CEO of Lumyna, highlighted the partnership as a significant milestone. “The value-add that Lumyna brings as both manufacturer and distributor of innovative investment solutions builds on the foundations we have established over the past 17 years in the liquid alternatives space. We are delighted to partner with such a high-calibre manager as Twelve Capital, alongside market leaders Descartes and Generali.”
