Tremor Technologies Inc., the programmatic insurance and reinsurance risk transfer marketplace provider, has successfully brought $600 million of capacity to, priced and placed the property catastrophe reinsurance program renewal of carrier W. R. Berkley Corporation.
W. R. Berkley first used Tremor for its 2019 property catastrophe reinsurance program placement, later taking an investment in the insurtech company.
In facilitating the placement, Tremor’s programmatic marketplace brought more than 50 reinsurance providers from all major markets to the W. R. Berkley 2020 Property Catastrophe Program placement, with $600 million of capacity made available to it for the renewal.
Including this latest auction, Tremor’s marketplace has now exceeded over $2 billion in reinsurer quotes and counts more than 100 reinsurers, Lloyd’s syndicates and insurance-linked securities (ILS) funds as members of its marketplace.
That’s a significant chunk of the global reinsurance market, enabling Tremor to bring meaningful limit to any users that opt to place their programs using its platform.
Tremor explained that the process of placing Berkley’s renewal was “extremely efficient.”
Reinsurers received the materials related to the submission, the contract was negotiated and finalised in advance, then the Tremor quoting window was open for a number of days to allow bids to be placed.
Reinsurance capital providers were able to log in and submit their blind, sealed bids and a number took advantage of the new advanced quoting capabilities that Tremor had launched recently.
Once the quoting window closed, the results of the placement were reported to all sides of the market, with details of the final clearing price per layer of the program, what precise allocation reinsurers had secured and then lines were ready to sign
Melissa Emmendorfer, Senior Vice President, Insurance Risk Management at W. R. Berkley Corporation, commented onn the successful placement, “Completing our first renewal on Tremor really emphasized the benefits of the platform. This year, with less time spent on the education process, the timing efficiency gains were more obvious, highlighted by the fact that the entire program was priced and allocated before Thanksgiving. Tremor’s enhanced technology, which included additional features as suggested by reinsurers during our placement process last year, performed well and we are pleased with our outcome- both in terms of cost as well as the broader distribution of reinsurance partners that received a share of our placement.”
The panel of 50 participating reinsurance providers ensured diversification across the market, with a large number of London market participants, ILS funds and also a large number of smaller reinsurance firms participating.
Using technology helps to level the playing field somewhat, when it comes to allocations of risk which can result in much broader syndication across the market, albeit controlled by ceding company preferences.
Dr. Hilary Paul, Partner at LGT ILS Partners, on behalf of Lumen Re (Bermuda), commented on the experience of participating as a market, “We like the approach to quoting on Tremor for certain transactions and find the process extremely efficient. In particular, it’s great to be able to offer capacity and get the resulting signed lines the next day! In addition, we find the insight that we gain into the broader market view after the placement is completed to be very interesting and valuable.”
Tremor believes that in a marketplace such as the one we see today, where rates are hardening and retrocession capacity is tight, using its marketplace to make an early and efficient placement can be even more attractive to ceding re/insurers.
“After successfully executing Berkley’s property catastrophe placement last year, it was really exciting to price and place the program this year as Tremor’s first major renewal. We are thrilled with the results. We saw more reinsurers participate, more capacity made available and more capacity authorized with almost no support questions during the quoting process. Our advanced quoting features were utilized and despite a hardening market, we were able to find competitive market clearing prices and compute limit allocations in a matter of hours that met everyone’s expectations,” explained Sean Bourgeois, CEO of Tremor.
Tremor expects the rest of the reinsurance renewal season to be particularly active for it, with additional auctions planned for December and another $1 billion of limit committed from traditional treaty and facultative reinsurance programs, industry-loss warranty (ILW) placements and parametric risk transfer transactions.
Tremor supports a wide range of risk transfer structures and this has helped the firm gain traction with both buyers and sellers of protection, as its efficient marketplace can be used to match risk in different forms with the most appropriate capital.
Tremor also has big ambitions for 2020, expecting that it will triple the volume of risk placed using its marketplace in the year ahead.