Reinsurance linked investment

Speaking this morning during his firm’s earnings call, Adrian Cox, the CEO of London headquartered specialty insurance and reinsurance firm Beazley, gave a “hypothetical” answer to a question about potential exposure to the Vesttoo linked collateral issue.

Lumen Re, the rated reinsurance company of LGT ILS Partners, the specialist dedicated insurance-linked securities (ILS) investments unit of the private bank and asset manager LGT Capital Partners, has reported higher net premiums, revenues and profits for 2022, although gross premiums written declined in the year.

Fronting specialist Clear Blue Insurance Insurance Group has had its A- financial strength rating placed under review with negative implications by AM Best as the fall-out from the Vesttoo collateral issues continues.

Insurtech Vesttoo has issued an updated statement related to the allegations that some of the letter of credit (LOC) collateral used to underpin its transactions was forged or fraudulent.

Rating agency AM Best has said that it will review the collateral arrangements of all fronting companies that it provides ratings for, in light of the claims that collateral involved in transactions facilitated by Vesttoo could be fraudulent.

Obsidian Insurance Holdings, Inc., a hybrid program insurance and fronting carrier holding company, has told us that any impact from the fall-out of collateral related issues at insurtech Vesttoo could only have “de minimus” impact to its business.

Plenum Investments, the Zurich based specialist catastrophe bond and insurance-linked securities (ILS) investment manager, has announced the appointment of Dr. Andreas Rickert as a new member of its Board of Directors.

According to our sources, insurance-linked securities (ILS) fund managers are having continued success at closing down certain exposures to last year’s hurricane Ian, with a number of side pockets being finalised and trapped capital continuing to be freed.

Program fronting specialist Clear Blue Insurance Group has stated that while it does not expect a material impact to its ratings from the ramification of issues at Vesttoo, the company may seek out more reinsurance to protect its surplus and capital.

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