Bermuda-based Iris Reinsurance Ltd., an index and parametric focused third-party capitalised collateralised insurance and reinsurance company, is to report its modelled net asset value on a regular basis as its manager Cartesian Re opts for transparency in ILS.
Iris Reinsurance Ltd. (Iris Re) was launched in 2009, sponsored by global private equity investment firm Cartesian Capital Group, LLC and is an affiliate of and managed by Cartesian’s insurance-linked securities (ILS) investment unit Cartesian Re. The reinsurer offers capacity primarily in industry loss warranty (ILW) form, although based on both index and parametric triggers.
Iris Re issued a new class of non-voting, redeemable preferred shares and listed them on the Bermuda Stock Exchange (BSX) back in April 2016, as it raised new capital and sought to enhance the liquidity and transferability of investments in its strategy for institutional investors.
Now the reinsurer has taken this a step further, by arranging that each month one share will be crossed on the BSX market, treated as a cashless trade within the treasury account of Iris Reinsurance, Ltd.
Each time a share is crossed it will be at a trading price based its underlying net asset value, which will be independently determined by Horseshoe Management, Ltd.
The whole point of this is to be able to report the net asset value on a monthly basis to Bloomberg, providing potential and existing investors with enhanced transparency and awareness of the Iris Re reinsurance linked investment strategy’s performance.
Being an institutional only ILS investment product, the Iris Re reporting of NAV on Bloomberg may be the first time such a strategy has made its net asset value so regularly and transparently available. Other ILS funds do report their NAV’s to Bloomberg and have their NAV’s available via the terminal and website, but it’s unusual for a strategy which is not catastrophe bond only.
Charles Mixon, Director of Iris Re, explained; “Iris Re is pleased to announce that it has begun to provide a publicly reported net asset value for its BSX-listed preferred shares. To enhance the liquidity and information regarding the shares, this value is available by Bloomberg terminal and supports the redemption feature of the shares.
“We believe this is the first institutional ILS product to offer these features. We thank the BSX for its support and continuous efforts to increase transparency for investors.”
Iris Re wants to provide both transparency and regular, relevant information to qualified investors and with the help of the Bermuda Stock Exchange (BSX) and advice from listing sponsor Clarien BSX Services Ltd. and specialist ILS manager and fronting firm Horseshoe Management Ltd., has now begun the regular reporting of this modelled values of the Iris Re shares listed on the BSX.
In 2016 Iris Re has underwritten over $600m of industry loss warranty (ILS) based collateralised reinsurance limit and the company has been growing steadily since its inception, broadening out into parametric products alongside the more typical index based ILW’s.
By first enhancing liquidity for its investors, through the original listing of shares on the BSX, and now enhancing transparency by reporting a regular, third-party calculated net asset value, Iris Re and Cartesian Re are promoting transparency and this can only help them to gain greater interest in their investment offerings.