January 25, 2018 / 8:50 AM / a year ago

Natural disasters take toll on Dutch pension fund PGGM's insurance investments

AMSTERDAM, Jan 25 (Reuters) - Dutch pension fund PGGM, one of the world’s largest and a big player in disaster reinsurance, felt the impact of earthquakes, hurricanes, fires and floods in its annual results.

PFZW, the fund manager which oversees PGGM’s money, lost 13 percent on its insurance-linked products portfolio, leaving it with 3.84 billion euros in such investments. Insurance products make up about 1.9 percent of its total 197.2 billion in assets under management.

“The unusually heavy hurricane season in the United States in the past year and the damages for the insurance industry that flow from that led to a negative result,” in the fund insurance-linked investment category, PFZW said in a statement.

Last year was one of the costliest in history for those who insure against natural disasters.

In an analysis published Wednesday, Aon Benfield said 2017 had been the second worst year on record for natural disasters, which caused a total of $134 billion in damages.

As a result, some reinsurers had been expecting double-digit price rises across the board when the Jan. 1 renewals came around after all of last year’s losses.

In the end, however, global property reinsurance prices rose less than expected, with strong competition limiting increases to single figures.

A PGGM spokesman said the company had no intention of dropping its insurance linked securities, which offer attractive returns in most years. For 2017 overall, PFZW’s investments saw a 5.1 percent return. (Reporting by Toby Sterling; Editing by Keith Weir)

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