MS Amlin Asia Pacific Pte. Ltd, the Singapore-based operation of Lloyd’s re/insurer MS Amlin Underwriting Limited, has launched Phoenix 1 Re Pte. Ltd., a landmark special purpose reinsurance vehicle (SPRV) in Singapore.
Phoenix 1 Re is the first locally issued insurance-linked securities (ILS) structure designed to provide capacity to a local cedent, solely focused on the Pan-Asia region.
The new SPRV will provide collateralised capacity to support MS Amlin Syndicate 2001’s Asia reinsurance portfolio via its Singapore underwriting platform.
Phoenix 1 Re has secured $42 million of collateralised capacity, providing alternative capital providers with a unique opportunity to access MS Amlin Asia Pacific’s robust historical performance and diverse regional portfolio, which spans over more than 10 territories and specifically excludes key peak perils, such as Japan and Australia.
MS Amlin states that roughly 50%, or $21 million of the collateralised capacity was supported by investors or fund managers based in Asia.
Will Ho, Chief Executive Officer (CEO) of MS Amlin Asia Pacific, commented: “We are delighted to have secured funding for Phoenix 1 Re. Through the creation of a remote risk facility, which caters to regional business, MS AAP will now be able to leverage larger capacity that we can deploy to our core clients on their reinsurance programmes as demand and growth increases in Asia.
“Phoenix 1 Re is an important long-term strategic initiative for MS AAP as we continue to seek ways to build capacity and relationships with capital market partners, and we are grateful for the support received from MAS, Lloyd’s Asia and ILS Advisers in establishing the vehicle.”
The Lloyd’s insurer and reinsurer explains that the launch of the new SPRV enables its APAC unit to provide better products and services to their clients and partners locally, and also to drive new sources of alternative capital to help narrow the region’s protection gap (disparity between economic and insured losses post-event).
Pavlos Spyropoulos, CEO, Lloyd’s Asia, said: “The launch of MS AAP’s ILS vehicle is an important milestone in the Lloyd’s Asia platform’s growth story and evolution, setting a new paradigm for how capital can leverage the underwriting expertise we have developed in Singapore to access Asia Pacific business through Lloyd’s. The faith Phoenix 1 Re’s investors have placed in MS AAP is an endorsement of their strong underwriting capability, and of the value proposition of our platform in Singapore that enables local access to Lloyd’s unique licence network, financial security, expertise, and brand.”
Tim Yip, ILS Advisers, added: “We are delighted to have been able to support MS Amlin, MAS and Lloyd’s Asia in what we truly believe to be a very important step in the continued development of the Asia ILS market.
“Phoenix 1 Re finally allows ILS investors to gain access to the regions diversifying perils and exposure in a way that is specifically catered to alternative capital provider’s differentiated risk appetites and requirements, and through an underwriting team that has shown consistent success in navigating a very diverse region. As a completely new and unique transaction, this further shows the growth and experience that the local region has gained over the past 2 years, in being able to efficiently facilitate these transactions.”
MS Amlin Asia Pacific worked alongside the Monetary Authority of Singapore (MAS), Lloyd’s Asia and ILS Advisers, which is based in Hong Kong, to establish the new ILS vehicle, and was supported by numerous local service providers.
Lim Cheng Khai, Executive Director, MAS, noted: “MAS welcomes the launch of Phoenix 1 Re, the first pan-Asian catastrophe bond that covers multiple natural catastrophe perils across more than 10 countries. Phoenix 1 Re has a unique structure that accommodates different policy renewal and inception dates within its underlying portfolio of Asian risks, which makes it attractive to a wider pool of insurance linked securitisation (ILS) investors.
“Phoenix 1 Re is also the 10th catastrophe bond issued in Singapore, and bears testament to MAS’ continuing effort to grow the Asian ILS market and facilitate the use of innovative ILS structures to narrow the protection gap in Asia.”
