Tremor Technologies, Inc., a venture-backed start-up based in Greenwich, Connecticut, has announced that its programmatic risk placement marketplace is now fully operational, with significant buyers and sellers of reinsurance in place.
The reinsurance trading platform is designed to establish fair and efficient market prices for reinsurance risks and programs, powered by smart market technology.
Tremor said that risk will be allocated to maximise the net benefits of risk transfer, with participants setting limits on exposure across programs and placing bids to indicate the quantities they wish to sell or buy.
The market platform can then use these inputs to find the best allocation of risk and compute competitive clearing prices for settlement.
“We maximize value for both sides of the market and then fairly share that value among participants with competitive clearing prices,” said Peter Cramton, Tremor’s Chief Economist.
Tremor’s platform is also intended to fit seamlessly into existing workflows, with programs prepared by brokers and cedents placed on the platform with contracts and submission files in virtual private data rooms.
Reinsurers approved by the cedent can then review and evaluate the programs and submit private bids to an auction that matches capital to risk and reports the final trades and prices to be settled.
“Tremor has raised meaningful venture capital and has recruited a world class market design, product and engineering team that has been busy over two years building a tremendously powerful marketplace in direct partnership with market participants,” said Sean Bourgeois, Tremor’s Founder and Chief Executive Officer (CEO).
Tremor claims that the platform will allow insurers to benefit from a more dynamic market and more efficient bidding with competitive pricing, while reinsurers and alternative capital providers will benefit from more access to risk with powerful tools to manage their capacity across programs.
It added that, in other industries that have introduced programmatic technologies based on auction mechanics, intermediaries have played an important role in helping buyers and sellers optimise their strategies and develop new revenue sources.
“Intermediaries will be an important partner for Tremor,” continued Bourgeois. “Our approach lets intermediaries focus on their highest-value activities such as program design, bidding strategy and analytics while we focus on pricing, allocation and placement with technology. Brokers will be welcomed as programmatic traders. We have built access specifically for them to manage client accounts.”
Tremor is currently adding dozens of buyers and sellers to its platform, and has auctions planned for the fourth quarter of 2018, it said.