Insurance technology (InsurTech) start-up Tremor Technologies, Inc. has successfully completed the first fully programmatic placement of a property catastrophe reinsurance program for a top-20 U.S. property and casualty insurer.
Tremor has created an open, technology-driven, programmatic marketplace for reinsurance risk placement and this first auction saw a property catastrophe reinsurance program placed with a large panel of markets, both traditional and some alternative or ILS capital backed.
Almost 50 markets took part in the auction, with reinsurers from the traditional U.S., Bermuda, Lloyd’s, European and Asia-Pacific markets, along with several alternative capital markets, all bidding for lines on the property catastrophe program.
The auction featured bids amounting to almost $700 million of capacity across the unnamed U.S. P&C insurer cedants multiple layer property catastrophe reinsurance tower.
Tremor said that the auction resulted in the program being priced and placed successfully, adding that its technology performed exceptionally well.
“We are thrilled with the success of our first large panel property catastrophe reinsurance placement,” explained Sean Bourgeois, founder and CEO of Tremor.
“It was a true team effort including a highly innovative reinsurance buyer, a technically savvy reinsurance broker and the majority of the reinsurance industry adopting our technology to make the first truly programmatically priced and placed property catastrophe program a success,” he continued (hear more from Sean at our upcoming conference).
Tremor has made significant progress in its relatively short history, with now more than 60 reinsurance capital providers signed up and trained to bid on its auctions, representing almost $350 billion of capital.
The firm has further auctions lined up for 2019 and says that it has commitments to use its programmatic marketplace from reinsurance buyers lined up.
“Tremor is extremely well positioned to execute further transactions to become the world’s leading programmatic risk transfer platform,” the company said.
Tremor believes that current reinsurance market structure and the inefficiency of the existing risk placement and pricing process mean that risks are not always efficiently transferred.
As a result the company aims to bring a new paradigm to risk placement and pricing, ensuring that the risk is transferred to those best able to bear it and with the most competitive and efficient cost-of-capital.
Its batch auction processes can match risk and capital in such a way that they can optimise or improve pricing, while allocating the risks in the most appropriate manner in a fraction of the time and cost of traditional markets.
For those using the platform, whether protection buyers or sellers, rich sets of transaction parameter preferences can be expressed, along with price flexibility on protected quantities.
Tremor’s optimisation technology matches the risk to capital, helping to maximise the gains made from the trade for all participants. Risk holders are matched with the best protection for liabilities, while the capital providers are matched with the best risks for the portfolios they are building.
As a result, the Tremor platform could become a source of risk for ILS funds and markets, who on signing up to the platform will be able to access certain auction processes and use the marketplace technology to enhance the efficiency of their risk origination and perhaps take greater ownership of this too.
Sean Bourgeois, CEO of Tremor, will be joining a panel at our upcoming New York ILS conference on February 1st. Register today and joins us at the event before tickets sell out.