Fronting news

Porch Group, the owner of insurer Homeowners of America Insurance Company (HOA) which was impacted by the Vesttoo reinsurance letter of credit (LOC) collateral fraud, has agreed a $7.1 million settlement over constructive trust claims with the Vesttoo Creditors Liquidating Trust, court documents show.

Insurance-linked securities (ILS) focused solution provider Jireh Risk Advisors Ltd. has announced a partnership with independent insurance manager Strategic Risk Solutions (SRS) in Bermuda, that will see the pair delivering ILS related services, including risk transformation through a newly launched SPI, Strata ILS Ltd.

You would be forgiven for thinking the industry had moved on from the debacle that was the Vesttoo reinsurance letter of credit (LOC) fraud, but legal action continues and the latest case to be filed sees fronting specialist Clear Blue Insurance suing China Construction Bank for damages.

Hannover Re has continued to share a reduced proportion of its large natural catastrophe losses with insurance-linked securities (ILS) capital sources through the first nine months of this year, with just €18 million shared up to the end of September.

For global reinsurance firm Hannover Re, the business of collateralized fronting, where the company fronts reinsurance cedents for ILS investors and funds, is seen as a very important element of its business and an area of growth, executive Thorsten Steinmann said this week.

Aon’s segregated accounts company White Rock Insurance (SAC) Ltd. has filed a lawsuit in New York against China Construction Bank, alleging an “inside man” at the bank had represented that letters of credit (LOC) involved in the Vesttoo fraud were authentic, and claiming a minimum $140 million in damages from the bank for the losses […]

The management of fronting specialist Clear Blue Insurance are praised for the rapid and determined response to the issues that arose when the company found itself caught up in the reinsurance letter of credit (LOC) fraud perpetrated by Vesttoo, according to rating agency KBRA.

Global reinsurer Hannover Re has seen continued success in its business servicing and facilitating transactions in the collateralised reinsurance and insurance-linked securities (ILS) market in the first-half of 2024, with it notably beating its own full-year record for catastrophe bond limit fronted for already this year.

A pair of lawsuits that allege China Construction Bank staff were complicit in the reinsurance collateral fraud perpetrated by executives at Vesttoo could now be combined, as the Southern District of New York court looks to save time and conserve judicial resources.

According to Marc Grandisson, Chief Executive Officer of Arch Capital Group, there is an art to underwriting at this stage of the reinsurance market cycle and it’s all about knowing how hard to push and when to pull back.