Brilliant Reinsurance brings Chinese capital to Lloyd’s retro

A new Guernsey based reinsurance start-up, Brilliant Reinsurance (Guernsey) Limited, has been launched, becoming Guernsey’s first re/insurer with backing from China and targeting the provision of retrocession to underwriters in the Lloyd’s of London market.

Brilliant Reinsurance is managed and was set up by Alternative Risk Management (ARM) and will focus on underwriting business retroceded out of the Lloyd’s market. The reinsurers directors are Dr Yu-Tsung Chien and Malcolm Cutts-Watson.

Brendan Reeves, Client Service Director at ARM, commented on the launch, “It was important that the Chinese principals felt comfortable with the jurisdiction they were working with and Guernsey certainly met those requirements owing to our reputation as Europe’s number one captive insurance domicile and our well-regarded legal and regulatory environment.

“The fact that the Guernsey Financial Services Commission was engaged in the company’s set up from beginning to end and was always open to discussion and dialogue was also appreciated by our Chinese counterparts. It was important we developed the right structure for Brilliant Reinsurance and we are delighted to see it finally come to fruition. It’s a really positive step in the international development of ARM to be associated with such an exciting venture.

“Logistically, Guernsey is really well placed for Chinese businesses expanding their focus internationally. In addition, Guernsey Finance has had an office in Shanghai for the past 10 years and done a lot of valuable work over that period in raising the profile of Guernsey’s offering in financial services.”

Guernsey Finance Deputy Chief Executive Kate Clouston highlighted that the launch of Brilliant Reinsurance follows the signing of four insurance-related Memoranda of Understanding (MoU) between China and Guernsey over the past 18 months.

Most recently in March 2017, the Guernsey Financial Services Commission and the China Insurance Regulatory Commission signed MoU’s, as did Guernsey Finance and the Beijing Airport Economic Core Zone, a major Chinese business centre.

“Guernsey’s ties with China have rapidly developed in recent years, and we are very pleased that the island has gained such a positive reputation there as an expert in many different areas of financial services,” Clouston said.

“The insurance sector in particular is yielding new opportunities across the board and we look forward to helping Chinese companies enhance the international aspects of their work.”

The launch heralds more external capital being brought into the retrocession market, at a time when retro rates are expected to rise.

With Lloyd’s re/insurers having suffered relatively high levels of loss from the recent hurricanes, it’s expected that many will be taking up greater levels of retrocession in the year ahead, something Brilliant Reinsurance may be seeking to capitalise on with the backing of Chinese investor capital.

Join us in New York in February 2018 for our next ILS conference