Tremor marketplace claims ‘unprecedented placement speed’ in 2019
Programmatic reinsurance marketplace Tremor has highlighted what it calls the “unprecedented” speed with which it placed risks and the capacity it secured in 2019.
In its 2019 report, it said more than 100 clients signed up on both sides of the market, which achieved more than $2 billion in priced capacity.
Tremor collects bids over a short, fixed bidding window, revealing the range of capacity available at different price points. Tremor’s matching engine subsequently identifies the best coverage and market clearing prices based on the cedant’s preferences, with final prices and lines announced within hours of the close of bidding.
Tremor claimed its average placement collects an order of magnitude more pricing information than a traditional placement. In a typical brokered reinsurance placement, a handful of price points are collected during the quote phase. By comparison, on average across treaties placed to date, Tremor collected almost 300 individual price/quantity points representing firm commitments from 33 bidders over nearly $500 million in capacity.
“Tremor’s proprietary matching engine contemplated the complex price-quantity tradeoffs in these bids to identify prices that precisely cleared the market, every time,” said Bourgeois, Tremor CEO.
Tremor also said it executes pricing and allocation in a fraction of the time of a traditional placement, to the benefit of everyone involved.
“Tremor can execute the price discovery, firm order terms setting, capacity collection and line allocation phases of the transaction within 3-5 days rather than 3-5 weeks, freeing up resources that can be redirected to other important functions within the company,” said Jeremy Ginter, Tremor’s VP of sales.
Tremor said it connects a broad slice of the high-quality capital available in the reinsurance industry and opens up access on both sides of the market. Cedants can directly solicit bids from nearly all of the world’s top-quality reinsurance capital, with most capacity offered on Tremor being A rated or better, or fully collateralised. Similarly, it said that traditional reinsurers and alternative capacity providers can easily deploy their capital anywhere in the world.
“Here at Tremor these statistics excite us – they show how our programmatic trading platform turns an arduous, imprecise process into a quick and accurate one,” said Bourgeois. “Tremor opens transactions to the entire market to bring the best capacity to each risk and solicits detailed information about capacity pricing from everyone in order to make oversubscription, short placements, sign downs, and other inefficiencies a thing of the past. We look forward to bringing the unprecedented speed and accuracy of Tremor’s programmatic trading to more transactions in 2020 and beyond.”
