Tremor says ILW market growing with $100m auctions a week

Tremor, a programmatic re/insurance risk transfer marketplace, has auctioned more than $100 million a week since opening its industry loss warranty (ILW) marketplace in April. Spreads are narrowing rapidly as the traditional market continues to harden.

The marketplace has seen an average of $70 million capacity offered and $30 million of protection requested each week since launch. More than 10 markets have participated and more than 50 bids have been received.

Tremor noted that spreads are narrowing while the traditional market is hardening and activity is expected to increase going into June and July.

"Spreads have fluctuated each week, with the best buy and sell prices converging to produce a successful transaction for US wind and earthquake risk," it said.

“The Tremor team is thrilled with the early and consistent engagement of the industry with our new marketplace dedicated to ILW trading," said Sean Bourgeois, Tremor’s founder and CEO. "We have had more buyers and sellers than expected and much more volume than expected with new participants offering quotes every week - and we are still a few weeks out from midyear renewals."

Bourgeois noted that "reinsurance brokers are playing an important role as well, advising their clients how to bid programmatically on Tremor".

"We believe that activity will increase even further after midyear renewals complete when the dust begins to settle on traditional placements. Spreads have started to narrow quickly which is a great sign, signaling that the market is getting more and more serious about trading ILWs more frequently while the UNL market continues to harden. To promote further transparency, Tremor is pleased to release all of its aggregate market data, which is available to members of the Tremor marketplace.”

He added: “We offer a unique, discreet and transparent way to buy or sell common ILW structures which we believe will be highly attractive to reinsurers, Lloyd’s syndicates, ILS funds and for certain insurance companies. We hope that our market will continue to grow to become a permanent feature of the retro market to enable dynamic ILW trading throughout the year.”