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Hiscox Launches Collateralized Reinsurance Vehicle

Source: BestWire

Posted on 25 Jun 2013 by Neilson

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HiscoxHiscox has launched a new special purpose vehicle, which began writing collateralized reinsurance in June, the company said.

Kiskadee Re is based in Bermuda and received its license in April, according to the Bermuda Monetary Authority.

"It successfully completed its first deals during the recent June renewal season," Adam Alvarez, senior vice president of Hiscox, told Best's News Service. "This SPI complements our rated platforms in Lloyd's and Bermuda and ensures that we are able to continue to offer our clients a complete range of reinsurance products."

While many sidecars have been funded by hedge funds and private equity groups, Kiskadee Re is 100% capitalized by Hiscox.

Hedge funds and private equity groups are hungry to find investment returns unrelated to equity and bond markets, which has helped to spark a recent uptick in sidecars, A.M. Best said in March (Best's News Service, March 27, 2013).

The insurance industry is also getting more creative with how sidecars are used. For instance, earlier this year, Aon plc teamed up with Berkshire Hathaway to launch a new sidecar that will write business where the Lloyd's market participates, the company said. Unlike most sidecars, which write reinsurance business, this sidecar is globally available across all industry segments to write primary business for retail clients, Aon said (Best's News Service, March 13, 2013).

Hiscox's companies currently have Best's Financial Strength Ratings of A (Excellent).