Nephila backs Marsh / Schinnerer commercial property insurance facility

Nephila Capital, the largest reinsurance linked investment manager, is backing Alternus a new commercial property insurance facility underwritten by the Schinnerer Group and brokered by Marsh, bringing alternative reinsurance capacity to a retail solution for U.S. company property portfolios.

The product, Alternus, is launched by specialty underwriting managers the Schinnerer Group, through its subsidiary Victor O. Schinnerer & Company, and exclusively offered through insurance brokers Marsh. Schinnerer is part of Marsh’s own managing general agent (MGA) business.

Alternus will be offered to U.S. companies looking to insure risks associated with their global property portfolios and can cover up to 10% of an insured’s entire property insurance program with limits per program of up to $200 million available.

Schinnerer will underwrite and manage the business, while capacity is provided by Allianz Global Corporate & Specialty (AGCS) and Nephila Capital, so combining traditional and alternative reinsurance capacity in the same solution.

“By drawing on a mix of traditional and non-traditional capacity, Alternus provides insureds with greater flexibility to manage an increasingly complex array of risks,” commented Christopher Schaper, CEO, The Schinnerer Group.

“Providing retail clients with direct access to alternative capital to cover their risk is a significant innovation,” he added;

“The Property & Casualty industry must continue to evolve at a fast pace and this innovative risk transfer vehicle will be most appreciated by clients,” said Bill Scaldaferri, CEO and President AGCS North America. “The launch of Alternus is a significant step in helping to transfer risk more broadly. Bringing this product to US-based commercial organizations is part of our commitment to expanding our overall footprint in North America.”

Nephila Capital Co-Founder Frank Majors stated; “The insurance sector has become increasingly attractive to the investment community. Through Alternus, we have created a strategic and innovative structure that enables Nephila to give insurance clients choice and also offers our investors access to risk in the US commercial property retail market.”

Schinner calls Alternus “the first dedicated commercial insurance solution for retail clients backed by alternative capital.”

Of course it’s not the first time catastrophe and weather risk insurance-linked securities (ILS) specialists Nephila Capital have backed insurance program business.

The ILS manager works with a range of MGA and broker facility type products, providing the alternative reinsurance capital to back catastrophe and weather risks associated with these programs, often working alongside Allianz which acts as a fronting insurer and underwriting companion on certain arrangements.

It’s another sign of Nephila’s expansion and shift into more directly sourcing and backing insurance risk with its reinsurance capital, helping the manager to secure risk from further up the value chain, maximise margins on business underwritten and transact outside of the normal reinsurance renewal cycle.

Reinsurance capital sourced from institutional investors and ILS fund managers continues to play an increasingly important role in global insurance markets and arrangements like this allow commercial insurance buyers to benefit from the efficiency of the capital markets.

Join Artemis in Singapore on July 13th 2017 for ILS Asia, tickets on sale here