Nephila Capital launching specialty focused Syndicate 2358 at Lloyd’s

Nephila Capital, the world’s largest insurance and reinsurance linked investment fund manager, is expanding its activities in the key Lloyd’s of London marketplace with the launch of a new syndicate that will follow selected specialty lines underwriters performance.

Syndicate 2358 at Lloyd’s is being launched by Nephila Capital through its dedicated Lloyd’s managing agency Nephila Syndicate Management Ltd (NSM).

Scheduled for launch in the fourth-quarter of 2020, Syndicate 2358 will look to underwrite a diversified portfolio of specialty insurance and reinsurance risks from the Lloyd’s marketplace, for its ILS investor backers.

Nephila’s Syndicate 2357 at Lloyd’s, which is backed by funds under Nephila’s management, has been trading since 2013 and gradually expanded its remit in the market to become one of the leading writers of catastrophe exposed property and weather risk linked insurance and reinsurance business, with its stamp capacity target set at $554 million for 2020.

Now, the ILS fund manager will expand its sourcing of risk from Lloyd’s and deploy more of its efficient, capital market sourced underwriting capacity into that key underwriting marketplace, with the launch of this new venture.

Launching under the mantle of the Future of Lloyd’s initiative, Syndicate 2358 will be the first to adopt a following model while being directly backed by ILS capital.

Syndicate 2358 will look to partner with the leading underwriters at Lloyd’s, in targeted classes of specialty business, leveraging their access to and ability to originate risks to put the syndicate’s capital to work, to the mutual benefit of the investors and capital providers supporting it.

By writing a diversified portfolio of Lloyd’s specialty risks this is a step away from the more traditional Nephila model of catastrophe and weather risk exposure, with a broader remit to bring additional risks to Nephila’s investors that can be diversifying.

Nephila said the goal is to, “create a complementary source of returns for institutional ILS investors looking to broaden their exposure into specialty lines.”

As a result, this is the ILS managers first official foray into specialty lines and marks a sign of its intentions to bring third-party investors an increasingly diverse range of risk-linked investment opportunities.

By enabling efficient capital to be connected with underwriters at Lloyd’s in the most direct manner, Nephila can help them to write more business and gain larger signings, while creating the diversified portfolio of risks for its investors.

Nephila said that the following model, “allows for efficient and flexible access to risk.”

The ILS specialist added that its managing agency NSM will manage the specialty lines portfolio underwritten by the new Syndicate 2358 with its capital and look to generate an attractive risk adjusted return for its investors over time.

Adam Beatty, CEO of Nephila Syndicate Management Ltd, commented, “We are excited about this new venture for Nephila at Lloyd’s. We see an opportunity to build a high-quality investment proposition for ILS investors and to do it using the unique and attractive features of the Lloyd’s market.”

Frank Majors, co-founder and co-CEO of Nephila Capital, also said, “Our Lloyd’s business is an important part of Nephila’s strategy. We are delighted to support the Lloyd’s market further with an innovative new business that can contribute to the Future at Lloyd’s vision.”

Lloyd’s CEO, John Neal, added, “Nephila’s new syndicate represents an exciting step forward in our Future at Lloyd’s ambition, with a route for ILS capital to be more quickly matched with risk.

“I look forward to watching Syndicate 2358 develop, following its launch during 2020.”