Exchange Re, Malta RSPV for collateralised reinsurance, launched by USA Risk

Malta now has its first reinsurance special purpose vehicle (RSPV) as Exchange Re, a platform for collateralised reinsurance transactions, has been launched by captive management specialist USA Risk.

Utilising a cell based approach, Exchange Re will enable investors or ILS fund managers seeking to transact collateralised reinsurance deals the opportunity to locate them in Malta for the first time.

Malta has been seeking to establish itself as a European domicile for insurance-linked securities (ILS) for the last few years, enacting laws and regulations to enable structures to be formed and located there.

Now, USA Risk is the first to take the plunge and in establishing Exchange Re in Malta, the ILS and collateralised reinsurance market has a new option when it comes to the question of where to locate a deal.

The launch of Exchange Re places Malta among the first European Union jurisdictions to make cell structures available for insurance-linked securities transactions, offering the Maltese SCC structure as an alternative for investors and ILS managers.

Exchange Re follows the SCC structure, allowing for the creation of segregated cells, in order to separate of assets and liabilities between the different cells within the vehicle. Collateralised reinsurance transactions can then take place within the cells.

Exchange Re describes itself as the first “ILS platform in Malta for private collateralised reinsurance transactions organised as a securitisation cell company (SCC).”

John Tortell, vice president at USA Risk Group, told Artemis; “Exchange RE SCC established in Malta is proud to announce its launch yesterday 23/2/16 at SIFMA IRLS conference NY. Exchange Re Scc is an open architecture ILS platform open to cat risk and/or collateralized re type cells in a Solvency II environment. We have seen substantial interest in the market prior to the launch and are confident that this will result in a strong business pipeline over the next few months.

“Exchange Re is open to business with all insurance managers, brokers and arrangers in the market.”

Authorised as an RSPV under the Maltese RSPV Regulations and fully compliant with the EU Solvency II Regime, Exchange Re aims to offer lower costs and quicker set-up time for individual collateralised reinsurance transactions.

It’s good to see another real option for transacting private ILS and collateralised reinsurance deals come to market. It will be interesting to see how quickly Exchange Re and Malta can gain any traction and attract ILS fund managers to utilise this new service.