Tremor unveils online ILW initiative to ensure trading continuity during COVID-19

Programmatic reinsurance marketplace Tremor is to open weekly online industry loss warranty (ILW) auctions in an effort to ensure that the ILW market continues to operate during the outbreak of coronavirus (COVID-19).

Tremor will begin the auctions on April 2 and post a range of common ILWs. Interested parties can submit blind, sealed bids to buy and/or sell the posted ILWs; upon the close of bidding, Tremor will compute a market clearing price for each ILW and consequent trades. The bidding window will close at the end of the day each Thursday, the auction will run and results will be reported the following day.

Tremor has partnered with PCS, a Verisk business, for the initiative and will use PCS catastrophe loss estimates for the United States, Canada, Japan, and the Asia-Pacific region as well as global cyber as the reference trigger on transactions cleared.

Additionally, Tremor will be partnering with brokers in innovative ways to help bring trades to its continuous ILW marketplace. The company believes that brokers will continue to play an important role providing guidance and technical expertise as needed.

“The re/insurance market must remain open for business, Tremor intends to not only play its part to ensure that this happens by helping to facilitate traditional transactions, but we are continuing to modernize trading in the process," said Sean Bourgeois, founder & CEO of Tremor.

"While some in the market are calling for delays and automatic contract extensions, we believe that we can help the market transact faster and more efficiently with our fully cloud-based marketplace technologies - even when facing the enormous challenges the market faces today,” he added.

Tom Johansmeyer, head of PCS, said: “I’ve been a believer in Tremor since its earliest days and feel strongly that their technology can help address an important need in the global ILW market. Increased demand for ILWs over the past twelve months could potentially increase even more as a result of the impact COVID-19 could have on market conditions. The time is right, and the team is right. Tremor’s approach to market design should help protection buyers and sellers operate efficiently. We look forward to supporting Tremor in this initiative, particularly as we add more risk areas to our portfolio, which will help Tremor broaden its support to the global re/insurance industry.”