TigerRisk unveils cat capacity SWAT team
A tricky renewal looms for cedants so TigerRisk is identifying new sources of property-cate capacity.
Reinsurance broker TigerRisk Partners has formed what it is calling a cat capacity SWAT team, dedicated to identifying new sources of property-catastrophe capacity, as a potential capacity crunch looms for cedants ahead of next year’s cat renewals, many of which are themselves seeking more coverage as property exposures soar.
Rob Bredahl, chief executive of TigerRisk Partners, which is in the midst of merging with Howden following the $1.6 billion deal unveiled in June, says that cedants seeking large amounts of property-catastrophe capacity should be under no illusions as to how tough this renewal could be.
“I have seen some brokers playing down how difficult the market is going to be,” Bredahl said. “We think it could be extremely difficult and we, and our clients, are preparing for a very tough market. If we are wrong, it would be a great relief, but it’s better to prepare.
“So, we are preparing, we are advising our clients to prepare and we are putting in place backup plans if the renewal doesn’t go as we hope it will go. Clients are concerned about availability of capacity for the first time in decades. They’re pausing on adding more catastrophe exposure to their balance sheets because of the potential lack of reinsurance.”
Central to its strategy to find solutions is Tiger’s so-called SWAT (special weapons and tactics) team. The logic is sound: in the context of hardening rates, now is a very good time to invest in property-cat business. The challenge is simply explaining the opportunity to investors in a way that cuts through the wider noise of macroeconomic challenges including inflation and rising interest rates—and to get deals done in time for the year-end.
A sneak preview: more exclusive content and interviews inside
A sneak preview: more exclusive content and interviews inside
Flexible capital model would make Lloyd’s ‘more attractive’
A mechanism whereby investors could invest in Lloyd’s on a shorter and more flexible basis is a promising potential development.
As Lloyd’s moves to modernise and transform its marketplace, one of the most exciting potential developments could be creating a mechanism whereby investors could invest on a shorter and more flexible basis, Vicky Carter, deputy chair of Lloyd’s and chair, global capital solutions, international, at Guy Carpenter, told Monte Carlo Today.
Such a move would be limited to specific types of capital writing specific short-tail risks and would potentially leverage London Bridge, the ILS structure the market created in 2021 to allow alternative investors to deploy capital in the market. More recently, London Bridge 2, a second protected cell company, was established to offer broader permissions for ILS business and give greater flexibility to the market and investors.
“One of the areas where it would be great to see further development is around the flexibility of capital solutions at Lloyd’s,” said Carter. “The creation of the London Bridge facility and more recently London Bridge 2 continue to enhance the appeal of the market to investors, but by looking at ways which would allow for capital to be released earlier, potentially subject to no losses. This would be hugely attractive to potential investors.”
