Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Gemini Re targets $500m+ launch as ILS asset manager


Gemini Re, LLC is a new insurance-linked securities (ILS) asset manager which is domiciled in Florida and plans to launch in time for the mid-year 2018 reinsurance renewals with between $500 million and $750 million of capacity to deploy, through a patent-pending product suite.

Gemini Re is led by Subhashish Dutta, President, who prior to founding the company spent a decade with reinsurance broker Guy Carpenter in a range of roles, with a focus on both traditional and synthetic hedging products for re/insurers. He has a track record of innovative reinsurance product design, structuring and implementation which he aims to channel to ceding companies through this new venture, backed by third-party capital.

Dutta recognised an opportunity presented by a fundamental problem that the re/insurance market faces, that the current range of reinsurance products are often not meeting the needs of primary carriers and the problems they face are not being adequately addressed.

These gaps in coverage, or sometimes total lack of protection, often leave primary insurers bare to certain catastrophic event scenarios, something Dutta and Gemini Re hope to solve with their patent-pending reinsurance product design.

Gemini Re hopes to generate significant demand for its products, by offering coverage that is different to the standard market offerings, backed and collateralized by efficient capacity sourced from capital market investors.

Dutta explained to Artemis, “Product Innovation is vital for executing a successful risk transfer strategy. We’ve assembled an extremely experienced team across a diverse range of skill sets to carry out our vision.

“Field experience melded with data driven analytics is essential in building innovative products to solve for insurer’s current problems. We’re excited to source attractive risk that can be packaged to bring investors value-added incremental deal exposure and additional alpha while muting volatility.”

Dutta explained that the company is not launching in response to the catastrophic losses of 2017, but does see evidence in the fallout from these events that encourage their belief that the Gemini Re product suite can fill a gap in the current reinsurance market offering.

The company has been building out a team and creating relationships with brokers and ceding companies in recent months, as well as beginning to market the Gemini Re offering to potential institutional investors.

Since August 2017 Gemini Re has been working on developing its product suite, filing patents for its product designs and aligning capacity from investors.

The first reinsurance product that Gemini Re will bring to market is a patent-pending structuring model, which the firm has designed to meet the current needs of catastrophe-exposed insurers operating in a challenging environment.

Gemini Re said that the model has been constructed in such a way that the sourced catastrophe risk can be matched with institutional ILS investors based on their risk profile and appetite. This product is now available for the upcoming June renewal season, the firm said.

Dutta told Artemis that the response from the market has been positive so far, and Gemini Re is already citing strong demand from reinsurance brokers for its product offering.

The firm is aiming to have a meaningful amount of reinsurance capacity available for potential ceding clients at the mid-year 2018 renewals, with an anticipated capital raise expected to give them between $500 million and $750 million of capacity by June.

In fact, Gemini Re has already received commitments for $500 million of capital, however the firm told Artemis it does not necessarily have to deploy all of it. That will depend on the availability of attractive business to underwrite, as well as prices available in the market.

Head of Fundraising, Michael Taylor, commented on the capital raise so far, “We’re excited by the reception from various investors we’ve met with thus far who see us as differentiated and an incremental source of deal flow.”

Bringing something new to market will ensure Gemini Re receives interest, on both the ceding company and investor side of its business. The capacity target is ambitious, but if the product truly represents something unique in the reinsurance market there is no reason this cannot be easily achieved or even surpassed.

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