Nephila’s Velocity MGA adds North Carolina & New York coastal policies

Reinsurance, catastrophe and weather risk-linked investment fund manager Nephila Capital will add a new source of risk from the U.S. eastern seaboard, as its managing general agency (MGA), Velocity Risk Underwriters LLC has expanded into North Carolina and New York.

Velocity Risk Underwriters said yesterday that it has further expanded its home insurance product offering, to now sell coastal homeowners policies in North Carolina and New York.

Nephila Capital has been leveraging its Velocity MGA as an intermediary to source portfolios of catastrophe exposed insurance business, which can then be backed by Nephila fund sourced reinsurance capital.

Often working with other insurance capital providers that can take out much of the volatility in the portfolios of primary insurance risk, it is the catastrophe exposed quotient that Nephila typically seeks to generate a return on for its investors.

As a result, Velocity has largely underwritten in regions that are catastrophe exposed and with North Carolina and New York coastal regions this is adding another source of U.S. wind exposed property risk.

The company has also added a claims arm, Velocity Claims, with the goal of reaching out to customers affected by storms and hurricanes immediately after catastrophe strikes to reduce the chances of loss inflation and creep.

Hence, by operating in these wind exposed areas of primary risk and providing added value claims related services, Nephila Capital’s MGA Velocity Risk Underwriters can also seek to improve the performance of a portfolio of catastrophe exposed primary property risks. Ultimately improving the return profile of the portfolio for Nephila and its investors.

“We are thrilled to add North Carolina and New York to our list of states where homeowners insurance will be available,” commented Jose de Diego, Director of Independent Agencies at Velocity Risk. “We’ve started visiting with agents and brokers in coastal communities, and they look forward to having a well-backed, financially stable insurer available to their customers. We know last summer was difficult for many homeowners in North Carolina who were affected by Hurricane Florence. While we hope another storm of this magnitude never hits the eastern seaboard again, if it does, we will be ready.”

“Velocity Claims is dedicated to providing all customers timely, accurate and friendly claims service on day-to-day claims, as well as catastrophe events, and we have a proven track record of performance that you can rely upon,” added Velocity’s Chief Claims Officer, Rod Harden.

The exposures that Velocity underwrites are typically backed by reinsurance capital from Nephila’s funds.  Adding new coastal regions sources more risk for Nephila’s platform, more directly from primary insurance customers.

By working in this MGA set-up, Nephila Capital can source risk for its insurance-linked investment strategies more directly, ultimately enhancing the efficiency of its risk capital, which backs up these ventures with reinsurance capital, and likely lowering the intermediation costs inherent in the risk to capital value-chain.

Adding the claims service layer only promises to enhance the returns even further, which is becoming a vital strategy as evidenced by recent storms like Irma.

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