Flagstone’s underwriting and risk modeling processes use a wide set of the RMS models, accompanied by an extremely high proportion of detailed data to best analyze their exposures. RMS concluded that the methodology and assumptions employed would provide a reasonable and prudent representation of the underlying risks inherent in the transaction.
“While a third party could remodel a smaller indemnity transaction, it would be impractical for a modeling firm to reanalyze a portfolio with hundreds of cedants, particularly given the typical time constraints on cat bond deals”, said Peter Nakada, managing director at RMS Consulting.
He added: “This transaction demonstrates the value that can be added by assessing a reinsurer’s own modeling, and we are pleased to continue reviewing these deals as the market for them evolves.”
Details of the Valais Re deal can be found in our Deal Directory.
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