Insurance-Linked Securities

RenaissanceRe has been an active participant in the insurance-linked securities market since the late 1990s. As a client-focused franchise, we continuously seek to find efficient capital sources to match our clients’ risk. We use ILS as an important complementary means to serve clients’ needs, as well an important component of our own general risk management strategy.

Insurance-linked securities are generally privately placed fixed income securities of which all, or a portion of, the repayment of the principal is linked to catastrophic events – for example, the occurrence of one or more hurricanes or earthquakes producing industry losses exceeding certain specified thresholds. We underwrite, model, evaluate and monitor these securities using similar tools and techniques used to evaluate our more traditional property catastrophe reinsurance business assumed.

RenaissanceRe Fund Management

Our Ventures team works on a range of customized reinsurance transactions and we have participated in and continuously analyze other attractive opportunities in the market for insurance-linked securities and derivatives. Our products contain a number of customized features designed to fit the needs of our partners. RenaissanceRe Fund Management Ltd. manages a cat bond fund and a collateralized reinsurance fund. The Ventures team is also responsible for structuring a tradable note covering US remote risks.

The cat bond strategy offers capital markets investors the opportunity to gain exposure to a portfolio of insurance-linked securities, such as catastrophe bonds. The valuation of such instruments is largely driven by the occurrence of natural catastrophes such as hurricanes and earthquakes, which are uncorrelated to the financial markets. Cat Bonds are structured as floating rate securities and issued under Rule 144A. Cat bonds offer an attractive risk-adjusted return that is non-correlated with the broader capital markets.

The collateralized reinsurance strategy provides exposure to natural catastrophe risks in both the reinsurance and retrocession (“retro”) markets on a fully collateralized basis. The collateralized reinsurance product is similar to traditional reinsurance but capacity is typically provided by an unrated entity and the underlying contract is required to be fully collateralized. Our strategy focuses on both worldwide aggregate and per-occurrence primary and the retrocessional property catastrophe excess of loss markets.

The tradable note provides RenaissanceRe with proportional reinsurance on a select portfolio of U.S. property cat risks. The structure allows both our institutional investors and our cat bond fund access to risks that would not ordinarily be transferred to the capital markets.

Joint Ventures

We actively manage two property catastrophe-oriented joint ventures – Top Layer Re and DaVinci Re – which allow us to leverage our access to business and our underwriting capabilities on a larger capital base. Renaissance Underwriting Managers, Ltd. acts as the exclusive underwriting manager for each of these joint ventures.

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Team

Aditya Dutt
President
Renaissance Underwriting Managers, Ltd.
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Chris Parry
Managing Director
RenaissanceRe Ventures Ltd.
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Sebastien Iaxx
Managing Director and Portfolio Manager
RenaissanceRe Ventures Ltd.
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Laura Bonanno
Vice President
RenaissanceRe Ventures Ltd.
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