Lloyd’s broker Turker Re has set up a new Capital Solutions unit to tap into the alternative capital market, starting with a new industry loss warranty (ILW) product for earthquake risk in Turkey.
Using its established presence in the Turkish marketplace, Turker Re is hoping to take a lead role in enabling this market to access the alternative capital and insurance-linked securities (ILS) investors for reinsurance capacity.
“We have big ambitions and our new EQ ILW is an important step forward in developing that market,” said Eray Turker, Director and CEO of Turker Re.
“The ILW product brings additional and alternative capacity for Turkey EQ and any insurer or reinsurer being exposed to Turkey EQ risk can benefit from that,” he continued.
“Considering the hardening retrocession market, we believe that this product will be a good complementary and alternative to the existing reinsurance and retro programs. Innovative products like the new ILW demonstrate our technical abilities and willingness to be a market leader in Alternative Risk Transfer (ART) in the region.”
Turker Re’s ILW product, which relies on an industry loss trigger from PERILS, marks the first of its kind to be sold by a broker directly located in Turkey
“We are pleased that Turker Re has selected PERILS as the reporting agency for this new ILW product,” said Luzi Hitz, Director and CEO of PERILS.
“Turkey is a high-growth economy with large earthquake exposures. Any solution which facilitates risk capital into the market will be beneficial to manage this growing earthquake risk.”
The PERILS reporting threshold for a Turkish earthquake is set at €200 million, which is significantly higher than the $10 million threshold of industry peer PCS.
PCS designated the recent earthquake in the Izmir region of Turkey as a catastrophe to track and is so far the only company to have reported on insured catastrophe losses in the country.