MS Amlin, the Lloyd’s global specialty re/insurer, has confirmed that its Singapore-domiciled operation, MS Amlin Asia Pacific Pte. Ltd (MS AAP), has secured collateralised capacity through numerous investors worldwide for the successful renewal of its local special purpose reinsurance vehicle (SPRV), Phoenix 2 Re.
This is the fourth Phoenix Re collateralized and securitized sidecar transaction from MS Amlin, and is notable as it is the world’s first renewal of an insurance-linked securities (ILS) arrangement that is domiciled in Singapore.
Following the renewal of Phoenix 2 Re, MS APP now has four vehicles in its series in Phoenix 1,2,3 and the renewed Phoenix 2 Re for 2024, giving it over $80 million capacity to support local Asian cedents.
The first Phoenix sidecar from MS Amlin came in 2021 at a size of $42 million, with the arrangement shrinking to $37.5 million for the 2022 underwriting year. Last year, MS Amlin upsized the arrangement to $45 million with Phoenix 3 Re.
Will Ho, Chief Executive Officer, MS APP, who has been invited to strike the gong to officially open the day’s trading to mark the bond’s listing on the Singapore Exchange, commented: “We are excited to have completed Singapore’s first ever catastrophe bond renewal, and our fourth transaction in the Phoenix Re series.
“This milestone confirms our commitment to Singapore’s expanding ILS market, and highlights the hub’s growing importance as a conduit for investment in Asia. We see strong growth opportunities in the region’s attractive ILS market, and have ambitious plans to further expand our Phoenix Re series. We are also exploring other Singapore-based risk transfer solutions to support global investors, increase insurance capacity in Asia, and help close the region’s insurance protection gap.”
MS AAP worked in conjunction with the Monetary Authority of Singapore (MAS) to originally establish Phoenix 2 Re in 2022, using an ILS catastrophe bond grant, alongside Hong Kong-based ILS specialist ILS Advisers, part of the HSZ Group.
While the Singapore cat bond grant was leveraged, it’s worth noting that this is not a full catastrophe bond issuance, but a securitisation of a quota share reinsurance sidecar arrangement and then an issuance of participating notes to investors.
The company notes that against the backdrop of the challenging natural disaster risk environment in the Asia region, this renewal will allow for more capacity for the local market, as well as increased reinsurance capacity for insurers, enabling more natural catastrophe cover to be written.
Tim Yip, Head of ILS, ILS Advisers, said: “We are delighted to have been able to provide our ongoing support, alongside the Monetary Authority of Singapore (MAS), to MS Amlin as they further their leadership role in expanding the Asia ILS market with the launch of their fourth Phoenix series. It is extremely rewarding that not only have the majority of investors renewed their commitment to the programme, but also to welcome new investors who have contributed additional capacity, demonstrating confidence in this opportunistic and promising region.”
Our ILS-focused sister publication Artemis lists reinsurance sidecars going back to 2005 in its sidecar directory.
