Hiscox unveils new ILS vehicle; Kiskadee passes $600m landmark
Kiskadee Investment Managers, the third party reinsurance capital and insurance-linked securities (ILS) unit owned by Hiscox, has launched a new platform that will allow sidecars and other vehicles to be easily formed using segregated cells.
Bermuda-based Cardinal Re has been described as a market-ready platform able to quickly create sidecars and managed accounts in a segregated cell. It will be run by Kiskadee Investment Managers, which also revealed it has hit the mark of assets under management of more than $600 million.
Speaking to Monte Carlo Today ahead of the launch of Cardinal Re, Jeremy Pinchin, CEO Hiscox Re, said: “The launch of Cardinal Re is the latest development in our Kiskadee offering and takes the assets under management to more than $600 million. We’ve reached that point very quickly.”
Pinchin revealed that further moves into the ILS space are in the offing.
“We are currently looking for other alternative vehicles for our investors,” he said. “These investors are private wealth funds but not hedge funds.”
He said that HIscox was not prepared to deal with hedge funds as it wasn’t prepared to take “that kind of risk on the asset side of the balance sheet”.
“We have been around for 100 years and we want to be around for another 100 years. We feel that the hedge fund vehicle doesn’t work for us,” he added.
Cardinal Re launched its first investor cell in July 2015 with the transformation of a portfolio of Hiscox insurance risk into a transaction supported by $55 million of external capital.
It adds flexibility to Hiscox’s use of alternative capacity for insurance or reinsurance risk, providing investors with unique market access to risk sourced within the Hiscox Group.
Pinchin said: “I saw the implications from the arrival of third party capital into the market and I also knew that I needed to diversify the business and tap into the new forms of capital coming in.”
That led to the birth of Kiskadee where the management style mirrors the Hiscox underwriting model.
Hiscox has a long history of managing alternative forms of capital and was a pioneer of utilising third party capital as far back as the foundation of the company in 1901. More recently it tapped the Lloyd’s names market in the 1980s; even today its Syndicate 33 has names as members.
“They have been very loyal supporters of us and willing to trade our capacity at significant levels,” Pinchin added.
His outlook for the market generally is a positive one.
“We still feel that there is growth in the reinsurance side. For Hiscox as a whole there is no lack of opportunities in our business as a whole.
“We have always had a balanced portfolio between retain and the big ticket end and we are developing the retail brand in the UK, Europe and the US, where we see huge growth opportunities.”
