Markel Corporation has announced that it intends to establish a new retrocessional insurance-linked securities (ILS) platform in Bermuda, comprised of a reinsurance company, fund entity and investment manager.
At the same time, the company said that it would start to wind down its existing Markel CATCo fund operations, which will be placed into run-off over the next three years.
Going forward, Markel CATCo Investment Management will cease accepting new investments in Markel CATCo Reinsurance Fund (MCRF) and will not write any new business through Markel CATCo Re (MCRe).
Markel revealed that its new platform will be overseen by Markel Global Reinsurance executives Jed Rhoads and Andrew Barnard, with initial product offerings to target the 2020 renewals.
The fund is expected to offer cedants a suite of property retrocession products with the ability to have coverage provided either on a collateralized basis, written by the new reinsurance company, or on a rated paper basis written by Markel Corporation’s existing Class 4 Bermuda-based licensed insurance company, Markel Bermuda Limited, or a combination of both.
“Markel is tremendously optimistic about the future of the ILS market,” said Richard R. Whitt, Co-Chief Executive Officer at Markel.
“Over time we expect this new platform to broaden Markel’s capabilities and provide institutional investors access to further opportunities in insurance risk, complementing our existing Nephila and State National operations,” he continued.
“The 2020 Retro Fund is expected to provide investors with access to property catastrophe retrocession exposure via a single-entry point and platform, and we expect it will additionally present a convenient and compelling offering to both our cedants and brokers.”
Markel added that the new platform will “expand on its current range of ILS capabilities,” drawing on the “deep talent” and resources from across the organisation.
Investors are expected to benefit from access to the risk that Markel can offer, it said, as well as its significant under and analytical capabilities and position in the reinsurance market.
