Vesttoo news

Speaking this morning in Monte Carlo executives from global reinsurance firm Hannover Re said that the Vesttoo issues with allegedly fraudulent letters of credit (LOC) is an “eye opener” but not systemic and they see no impact to their own pipeline of business in the insurance-linked securities (ILS) market.

Speaking this morning at an event in Monte Carlo for the 2023 Reinsurance Rendez-Vous, analysts at Fitch Ratings said that the Vesttoo scandal may push investors in insurance-linked securities (ILS) to focus on the safety of structures and the security of collateral.

The Chief Financial Officer (CFO) of the specialist Lloyd’s insurance and reinsurance marketplace, Burkhard Keese, called on the industry to be more diligent in light of the ongoing fraudulent LOC issue surrounding insurtech Vesttoo.

While the industry will spend its time poring over the initial findings of the fraud investigation at Vesttoo, one thing that stands out is the fact internal red flags were raised over the two purported Chinese “investor” groups as early as 2021, while the report also raises a question over whether they are even real […]

The investigation and audit undertaken within beleaguered insurtech Vesttoo by its board, with the help of Kroll, has now filed an initial report, saying that co-founders Yaniv Bertele and Alon Lifshitz were complicit in the fraud, as well as two execs connected to the network that found capital for the company.

Commenting on some of the happenings across the global reinsurance market today, in advance of next week’s Monte Carlo Rendez-Vous, rating agency Fitch said that it believes the Vesttoo collateral fraud case could drive a flight to quality and also reduce the use of letters-of-credit (LOCs) across the reinsurance industry.

Former Vesttoo CEO Yaniv Bertele has claimed no knowledge of the “document falsification” that occurred at the company, seeking to distance himself and co-founder Alon Lifschitz from the fraud, while also claiming that the Board investigation is conflicted given a connection to auditor Kroll.

Porch Group subsidiary Homeowners of America Insurance Company (HOA), a managing general agent (MGA) and insurance carrier hybrid with exposure to the Vesttoo-linked letter of credit (LOC) fraud, has now replaced some 84% or $147 million of reinsurance affected by the issues, but still been placed under temporary regulatory supervision.

In its objection to the prospect that beleaguered insurtech Vesttoo would be allowed to make termination payments to some of its staff, fronting specialist Clear Blue Insurance Insurance Group revealed that it had paid at at least $23 million in commissions to Vesttoo entities that provided collateral for reinsurance deals.

Markel has now joined the Vesttoo bankruptcy proceedings, seeking remedies after two letters of credit (LOC) totalling $127.75 million in value were found to be fraudulent in collateralized reinsurance transactions it had entered into.