Hyperion partners with specialist ILS firm Vario

Hyperion X, the technology and analytics division of Hyperion Insurance Group, has partnered with Vario Partners, a specialist in collateralised reinsurance structuring.

The partnership intends to assist clients through this period of uncertainty with collateralised, whole account stop-loss reinsurance cover.

Vario specialises in modelling, structuring and facilitating collateralised reinsurance backed by insurance linked securities. Backed by Hyperion X’s analytics, Vario’s approach to aggregate, multi-year stop-loss reinsurance will be deployed in the provision of scalable, investor-backed capacity.

The companies stated that while financial markets continue to react to the spread of the coronavirus, economic recession, and increased credit risk, there is growing demand for less exposed, non-cyclical products.

“This important collaboration makes new capacity available at a time when reinsurance and retrocession cover, particularly whole account stop-loss, is at or near all-time lows,” said Elliot Richardson, chairman of Hyperion X’s sister company RKH Reinsurance Brokers.

David Flandro, managing director, Hyperion X Analytics added: “This structure uniquely benefits earnings volatility and balance sheet strength at a time when retrocession rates-on-line have increased, and carrier financing costs are rising sharply. We are bringing this to market now to give (re)insurers access to a new source of stable, competitive capacity during this volatile period which enhances balance sheet strength for future profitable growth.”

Bryan Joseph, founding partner of Vario, commented: “Whole account risk transfer insurance linked securities meet the needs of insurers and reinsurers seeking to reduce underwriting and credit concentration risks. We believe that including a layer of contingent capital in a reinsurance structure provides companies with enhanced shareholder returns and protection in those years when an accumulation of events and reserve development can impair shareholder value.”