Oxbridge Re expects sidecar support for wildfire & Michael losses in Q4

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Cayman Islands based reinsurance firm Oxbridge Re Ltd. said that its fully collateralized reinsurance sidecar vehicle Oxbridge Re NS Ltd. will support the firms losses from both hurricane Michael and the California wildfires in Q4 2018.

Oxbridge Re said that it now expects to suffer a $6 million impact from catastrophe losses in the fourth-quarter of 2018, largely driven by these two major events.

The reinsurer said that it expects to report $3.1 million in losses from hurricane Michael and $2.9 million in losses from the California Wildfires in its Q4 2018 results.

Sidecar diversifies revenue streams for Oxbridge Re: CEO Madhu Share

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The Chairman and Chief Executive Officer (CEO) of collateralised reinsurer Oxbridge Re Ltd., Jay Madhu, explained that the firm’s recently launched sidecar vehicle diversifies its revenue streams and risk.

Oxbridge Re announced plans for its sidecar vehicle, Oxbridge Re NS Ltd., in late 2017 after registering the company in the Cayman Islands in December of 2017 as an exempted company.

The company’s Chairman and CEO said earlier this year that its newly licensed sidecar vehicle, which essentially enables the company to access capital markets capacity to augment its underwriting structure, shows that the firm has ambitions to be more of an asset manager.

NCM Re UK sidecar transaction renews at slightly larger $77m for Neon

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Lloyd’s and Bermuda insurance and reinsurance company Neon Underwriting has successfully renewed its UK insurance-linked securities transaction, which is akin to a sidecar, with a slightly enlarged $77 million issuance of notes from the NCM Re (UK PCC) Ltd vehicle.

Last year, Neon was the first to register and receive approval from the UK’s Prudential Regulation Authority (PRA) for what became the first insurance-linked securities (ILS) vehicle to transact business in the United Kingdom, NCM Re.

NCM Re entered into a $72 million quota-share reinsurance agreement with Neon’s Lloyd’s of London syndicate in that transaction, thus acting as a collateralised reinsurance sidecar to the syndicate, augmenting its capacity utilising third-party capital market investor funding.

Munich Re & PGGM add $380m Leo Re 2019 private sidecar arrangement

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Experienced insurance-linked securities (ILS) investor Dutch pension fund manager PGGM and global reinsurance firm Munich Re have now completed what appears to be the rest of their 2019 Leo Re Ltd. private sidecar arrangement, with another $380 million tranche of notes issued.

In December PGGM’s Leo Re Ltd. collateralised reinsurance sidecar issued a $20 million tranche of Series 2019-1 Class A notes, the first from the investors annual private arrangements that feature property catastrophe risk sourced from Munich Re.

Of course $20 million was unlikely to ever be the end of the arrangement, given the scale of PGGM’s investments into ILS and reinsurance and the amount of risk Munich Re can originate for the investor, hence this second tranche was to be expected.

Alturas Re sidecar launched at $55m for Fidelis

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Alturas Re Ltd., a new fully collateralised reinsurance sidecar vehicle, has been launched and successfully capitalised to the tune of $55 million, which will benefit the sponsor of the vehicle which we’re told is Fidelis Insurance Holdings Limited.

Fidelis Insurance Holdings Limited, the specialty focused insurance and reinsurance firm launched by Richard Brindle, now has two collateralised reinsurance sidecars, having launched Socium Re Ltd. back in June of last year.

Alturas Re Ltd. was registered as a Bermuda based special purpose insurer in November and was marketed to investors towards the end of the year.

Munich Re in $86.8m Eden Re II 2019 reinsurance sidecar issuance

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German reinsurance giant Munich Re has completed its first placement of collateralised reinsurance sidecar notes for 2019, with the sponsorship and placement of an almost $86.8 million tranche of Series 2019-1 participating notes from its Eden Re II Ltd. sidecar vehicle.

Munich Re has been tapping the capital markets for retrocessional reinsurance protection and sharing its underwriting returns with investors through collateralised sidecar vehicles named Eden Re since 2014, with the deals so far amounting to cessions of almost $2 billion of risk transferred over that time (all detailed in our Reinsurance Sidecar Transaction Directory).

For 2019 the reinsurer has begun with a smaller tranche of notes, as it did in 2018, with this $86.8 million of participating notes that are due March 22nd 2023.

PGGM in $20m Leo Re 2019 private sidecar transaction with Munich Re

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Dutch pension fund manager PGGM has completed its first issuance of notes from its Leo Re Ltd. collateralised reinsurance sidecar for 2019, with a $20 million Series 2019-1 Class A tranche of notes issued which feature property catastrophe risk sourced from Munich Re.

The Leo Re Ltd. series of private sidecar transactions have all been issued on behalf of one of the pension funds administered by Dutch pension fund manager PGGM and have all involved a private ILS transaction between PGGM and reinsurance giant Munich Re.

PGGM first used the Leo Re special purpose insurer (SPI) to arrange a private quota share or sidecar transaction with Munich Re for 2017, when a $200 million sidecar arrangement was issued.

Credit Suisse ILS backed reinsurers affirmed, but catastrophes take toll

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Both of the rated reinsurance vehicles that are managed by and backed by capital from the Credit Suisse Insurance Linked Strategies Ltd. team have had their ratings affirmed by A.M. Best, despite suffering losses from the catastrophe activity through 2018.

Kelvin Re, a rated reinsurance company backed by investments from the Abu Dhabi Investment Council, is projected to underwrite approximately $200 million of premiums in 2018, rating agency A.M. Best said, with the combined ratio forecast to fall between between 95% and 100%, so much improved on 2017’s 124%.

Humboldt Re meanwhile, which is backed solely by capital from the insurance-linked securities (ILS) funds managed by Credit Suisse Asset Management (CSAM), is forecast to underwrite over $240 million of premiums but is expected to fall to an underwriting loss, with a combined ratio of more than 105%, although that is again much better than 2017’s result.

Peak Re launches $75m Lion Rock Re, the first Asian sidecar

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Peak Reinsurance Company Limited (Peak Re), the Hong Kong based global reinsurer that is majority backed by Fosun International, has completed a ground-breaking insurance-linked securities (ILS) transaction, successfully establishing and launching the first Asian reinsurance sidecar deal.

Lion Rock Re Ltd. is a recently established Bermuda special purpose insurance (SPI) vehicle that has been registered to support the transaction.

One sidecar pulled on lack of investor appetite, others questioned on terms

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One collateralised reinsurance sidecar transaction that had been lined up for the January 2019 renewals has been pulled due to a lack of appetite from investors, while at the same time other sidecar arrangements are now being questioned for changes being proposed to their terms, Artemis understands.

It’s shaping up to be a particularly challenging January renewal season for the collateralised reinsurance and insurance-linked securities (ILS) space, after the proliferation of losses over the last two years and the resulting trapping of collateral, ongoing loss uncertainty and loss creep that has been seen.

As we explained earlier this week, there is an expectation that the January 2019 reinsurance renewals will be challenging, potentially late and that capital and losses are going to drive the negotiations, with the market perhaps even set to stop growing as investors and fund managers hold back on fund-raising and deployment.