Global insurance giant Allianz has sponsored a life and annuity focused reinsurance sidecar named Sconset Re Ltd., securing backing from institutional investors to capitalise the structure and partnering with PIMCO as well as other institutions for asset management support.
Sconset Re Ltd. is domiciled in Bermuda and will initially take a US $4 billion block of fixed index annuity risk from Allianz, through a reinsurance arrangement.
The sidecar structure will also enter into a forward flow agreement that will see a further US $5 billion to $10 billion of new life insurance annuity related risks reinsured to it over time.
Sconset Re will specialise in these indexed annuity risks, we understand, while asset management will also be a key focus for the vehicle.
Investment manager PIMCO is set to provide asset management services to the majority of the Sconset Re investment portfolio.
The goal of the strategy, for Allianz, seems to be in securing institutional backing to grow its life business in the United States, while enhancing the performance of large books of annuity business, off balance-sheet and backed by third-party reinsurance capital, leveraging the investment expertise of PIMCO and others to extract greater value from these books and enhance their returns as well.
Sconset Re has been capitalised by a range of institutional investors, including Voya and Antares.
Voya and Antares are not just capitalising the life reinsurance sidecar, they are also set to manage a portion of the investment portfolio as well.
Deutsche Bank provided financial advise to support Allianz in the Sconset Re sidecar transaction and was also the sole arranger of a debt financing facility provided to Sconset Re as well.
In a release from Deutsche Bank it is said that Allianz sees the Sconset Re sidecar opportunity as representative of the opportunity it sees with its life and asset management business in the U.S.
Life reinsurance sidecars continue to grow their role in the global marketplace, with many large re/insurers now sponsoring them as they seek to tap demand for insurance-linked returns and new asset management opportunities for their partners.
Find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of collateralized reinsurance sidecar transactions.
View all of our Artemis Live video interviews and subscribe to our podcast.
All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.
Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.
