New retro player Phoenix targets $100m
The chief underwriting officer of reinsurance start-up Phoenix CRetro Reinsurance Company has said he believes the business could provide as much as $100 million of capacity by the 2015 renewals and he hopes to have financial institutions on board as investors by the Monte Carlo Rendez-Vous.
Phoenix CRetro will offer capital providers in Central and Eastern Europe (CEE), the Middle East & North Africa (MENA) and countries that were formerly part of the Soviet Union (an area known as the Commonwealth of Independent States (CIS)) access to catastrophe retrocessional reinsurance business.
The company, which is domiciled in Bermuda but with an office in London, has positioned itself as a ‘bridge between catastrophe markets and the CEE, CIS and MENA’. It aims to allow businesses such as Lloyd’s syndicates or global reinsurers to access alternative capacity or capital from regions of the world which have historically had little involvement to the CAT retrocession market written on a worldwide basis.
“These are virgin markets when it comes to supplying capacity to these markets,” said Kirill Savrassov, the company’s senior vice-president and chief underwriting officer. “They have not historically been able to participate partly because of the low sovereign ratings of the countries where they are based and partly because most of the potential investors were too small to be relevant on their own.”
He says the initial investors in the new venture will mainly be primary insurance companies from the region. On their own, they could only supply limited capacity of between $1 million and $5 million each. But collectively, their potential capacity is much greater. Phoenix will pull this potential together.
He says the company is working on two deals presently but as its scope grows and as its investors start to diversify, he expects growth to come rapidly. He believes the business could be providing as much as $100 million of capacity by the 2015 renewals and he hopes to have new investors on board by the Monte Carlo Rendez-Vous.
“It is easier for both sides to work through a single vehicle than pull together deals involving many participants on their own,” Savrassov said. “Our investors right now comprise insurers from the regions but we are already receiving interest from financial institutions in the region. Given the trend of capital from this sector increasingly participating in the reinsurance markets in other parts of the world, we expect this project will be of interest to these type of firms in the region.”
R&Q Quest Bermuda is acting as a management company, providing a range of technical and management services to Phoenix and Nick Frost, the president of R&Q Quest Management Bermuda has taken the same position in Phoenix.
