Tremor places Markel property cat program layers, lines up further auctions

Tremor Technologies, Inc. continues to make impressive progress, as the programmatic reinsurance risk placement marketplace provider has completed another property catastrophe auction placement, and has more transactions lined up for the coming renewals.

Insurance technology (InsurTech) start-up Tremor operates an open, technology-driven, programmatic marketplace for reinsurance risk placement.

The firm completed its first auction of a property catastrophe reinsurance program last December, when almost 50 markets provided bids amounting to $700 million of capacity, resulting in the successful pricing and placement of an unnamed U.S. cedent’s multiple layer property catastrophe reinsurance tower with a large panel of markets.

We can now exclusively report that Tremor has now followed that with a successful pricing and placing of two layers of insurance giant Markel Corporation’s property catastrophe excess of loss reinsurance tower, in an auction that took place in the second week of April.

Speaking to Artemis, Tremor CEO Sean Bourgeois said, “Tremor was thrilled to work with Markel on this placement, a marquee insurance brand known for its market leadership and affinity for innovation.

“This is now the second major property catastrophe placement we have successfully completed in a few short months.”

In this placement for Markel, 20 reinsurance markets participated in a programmatic auction process that saw around $250 million of capacity made available on Tremor for $100 million of limit.

“We had a diverse range of reinsurers participate including leading firms from the US, Bermuda, Lloyd’s and Continental European markets.  Many of these reinsurers are repeat users of our marketplace and we continue to get great feedback for ease of use and performance – and of course, we continue to add new features based on this feedback to continue to improve the trading experience,” Bourgeois explained.

Julia Chu, Chief Global Ceded Reinsurance Officer, Markel Corporation, added, “Markel is increasing its commitment to the insurance innovation community. That is one of the reasons we utilized the Tremor platform for our property catastrophe placement. The placement met expectations and we are pleased with the results.”

Tremor continues to demonstrate that insurtech’s can quickly become a part of the fabric of the reinsurance value-chain, offering a programmatic marketplace through which ceding companies can have their program’s placed in the most efficient manner, while reinsurance markets (traditional and alternative) can offer their capacity based on their risk appetite and capital efficiency.

Tremor continues to expand the range of reinsurance markets that have been onboarded and signed up to use its programmatic risk marketplace, with now over 90 markets (traditional and insurance-linked securities (ILS) players) ready to respond to requests for capacity that are presented through Tremor’s system.

Commenting on the prospects for the coming months, Bourgeois said to Artemis, “Tremor has an exciting pipeline of placements including commitments from some of the world’s largest insurance companies – we have nearly $1 billion of limit committed to date to price and place a number of programs on Tremor over the coming months.

“2019 is going to be a breakout year for the company as programmatic trading becomes a permanent feature of the reinsurance market with Tremor firmly establishing itself as the market leader.”

Selling programmatic risk trading to an industry immersed in tradition and where personal relationships have historically been the entry point to gaining access to capacity was never going to be a simple task.

But as efficiency becomes increasingly important and ceding companies increasingly recognise that a manual placement of their reinsurance program layers is unlikely to ever be as optimal as a programmatic one, based on true appetite for risk and efficiency of capital, Tremor is gaining support and making rapid progress.

“We believe that we have now reached a tipping point in the reinsurance industry where programmatic trading has become inevitable,” Bourgeois said.

Adding, “Cedents appreciate the data-rich, modern trading environment we offer whereby we enable all sides of the market to express exactly what they want and then we use modern marketplace technology to solve for optimal price and limit allocation in minutes.”

Tremor’s platform can be used to place reinsurance and retrocession programs for any type of risk or class of business. It could even conceivably be used to place large facultative insurance risks that require multiple markets to provide the necessary capacity to back them.

By programmatically matching risk to the most appropriate and efficient capital, the placement process is far more optimised than can be achieved manually, making this type of technology vital for ceding companies to embrace and increasingly a tool that brokers and advisories should be offering to their client base.

We understand that Tremor has a number of clients lined up for auctions in the coming weeks, ranging from traditional placements of reinsurance, to retrocession and more ILS focused auctions.

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