Lancashire renews Accordion collateralized property retrocession sidecar

by Artemis on June 11, 2012

Lancashire Holdings, the Bermuda and UK based provider of specialty insurance products, have announced the renewal of Accordion, their fully collateralized property retrocession sidecar facility. The Accordion Reinsurance Limited sidecar, which Lancashire launched last year, will be renewed for another twelve months to allow Lancashire to take advantage of current retrocessional reinsurance market conditions.

Accordion will continue to be flexibly capitalised for up to $250m in the same format as a fully collateralized sidecar quote share agreement with an innovative capital draw down feature which helps Lancashire benefit from additional capital when it is required or an opportunity to deploy it presents itself. An example of this occurred earlier this year in February when Lancashire deployed $75m more capital through Accordion Re to take advantage of the Japanese reinsurance market renewals on 1st April.

Accordion Re continues to act as a quota share reinsurer for Lancashire Insurance Company Limited on its worldwide property retrocession business. It will continue to be used when opportunities present themselves, deploying capital when market conditions are most attractive to enable Lancashire to underwrite additional cover.

Richard Brindle, Group CEO of Lancashire, said; “The renewal of the Accordion facility allows Lancashire to continue to offer property retrocessional coverage at attractive rates following the accumulation of international property catastrophe losses during 2010 and 2011 which reduced the amount of available reinsurance. Supported by the Accordion capacity Lancashire remains well positioned to take advantage of these underwriting opportunities, particularly in the event of an active US storm season.”

The renewal of Accordion Re is the third sidecar announcement in recent weeks after RenaissanceRe announced their latest Timicuan Re III sidecar and Validus announced their next AlphaCat sidecar vehicle. These announcements are continuing evidence of the opportunities available in reinsurance for capital market capital to finance underwriting of risk and benefit from the currently attractive retro and reinsurance market rates.

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