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ARTICLE · 16 JANUARY 2015

Paradigm Shift - Collateralised Reinsurance

Guernsey has seen a dramatic rise in the number of these transactions over the past few years and has established a reputation of turning these transactions around quickly and efficiently.

GuernseyInsurance

Justin Wallen, Managing Director of the Hexagon PCC Group in Guernsey, examines the trends currently emerging from the January 1, 2015 renewal season for collateralised reinsurance from his perspective as a transformer cell manager.

The growth of collateralised reinsurance has been well documented. Cat bond returns have been falling, yet bond placements are oversubscribed despite the fact that the multiple of pricing over expected loss also continues to fall. Faced with this environment, a number of ILS funds now seek alternative returns from private placements of reinsurance contracts where they provide the collateral but need a transformer cell reinsurer to write those risks and access the potential returns.

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