Intertrust assists Neon on launch of UK’s first ILS transaction

by Artemis on January 16, 2018

Global provider of corporate, fund and capital market services Intertrust has assisted specialist Lloyd’s and Bermuda insurance and reinsurance company Neon Underwriting in the completion and issuance of the first insurance-linked securities transaction in the UK.

Neon was the first company to receive approval from the UK’s Prudential Regulation Authority (PRA) for what is now the first insurance-linked securities (ILS) vehicle to transact business in the United Kingdom.

The ILS transaction saw Neon’s UK ILS vehicle, a protected cell company and insurance special purpose vehicle (iSPV) NCM Re (UK PCC) Ltd, enter into a $72 million quota share reinsurance arrangement with Neon Syndicate 2468, underwriting a portion of its property treaty reinsurance and direct & facultative insurance portfolios.

Intertrust said that it worked closely with sponsor Neon and the other service providers involved in the ILS transaction, to secure the necessary regulatory approvals to set up the vehicle.

Intertrust has been appointed to provide a range of corporate services to support Neon’s UK ILS vehicle on an ongoing basis, the company said.

The firm said that its, “Ability to provide a broad range of high quality services, skilled teams and experience across a wide range of asset classes and ability to work with regulated entities was crucial to ensuring the successful and timely delivery of this unique deal.”

Cliff Pearce, Global Head of Capital Markets at Intertrust, explained, “Intertrust has long been recognised as being at the forefront of delivering complex, highly structured and innovative deals. However, as this is the first transaction of its kind to be launched in the UK, Intertrust is especially proud to have worked with Neon in this pioneering transaction which will no doubt pave the way for further transactions.

“There is likely to be an increase in demand among reinsurers for these new ILS structures as the insurance market takes advantage of the new regulatory framework. As a first mover in the field, Intertrust is particularly well placed to manage similar deals in future.”

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