Aon Insurance Managers, the insurance and reinsurance broker’s unit that provides management and administration services for insurance, reinsurance, ILS and captive vehicles and structures, is working with Credit Suisse Asset Management’s (CSAM) Kelvin Re.
Kelvin Re was launched recently by CSAM, as the ILS and reinsurance linked asset manager established its first rated reinsurance vehicle in Guernsey. Kelvin Re is an interesting venture, backed by investment from the Abu Dhabi Investment Council and operating a hedge fund style investment side strategy.
Kelvin Re Limited (Guernsey) intends to underwrite short-tail property and specialty lines, targeting building a $100m book of business in its first year with around two-thirds of that being non-proportional catastrophe risks, while investing 50% of its assets with hedge funds. With a single third-party seed investor and an ILS manager providing its underwriting, Kelvin Re is truly a unique vehicle.
Interestingly, according to Aon Insurance Managers (Guernsey), Kelvin Re is also the first rated commercial reinsurance company to be headquartered in Guernsey, which is a milestone for the domicile as it seeks to continue to grow its reinsurance and insurance-linked security (ILS) industry business.
Aon Insurance Managers (Guernsey) will provide Kelvin Re with management services. Paul Sykes, Aon Guernsey’s Managing Director, commented; “The launch of Kelvin Re is evidence of Guernsey’s ambition to become a reinsurance market alternative to Bermuda.”
Kelvin Re is set to be a very interesting vehicle to watch, not least whether it takes on more third-party funding from other investors or whether it remains solely backed by Abu Dhabi. For Credit Suisse Asset Management, Kelvin Re provides another strategy and another way to underwrite risks, allowing it to offer rated reinsurer paper out of Guernsey to complement its fully-collateralized coverage options.
– Kelvin Re, CSAM’s reinsurer with hedge fund strategy (of sorts), is rated.
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