MS Amlin launches $42m reinsurance sidecar to support Lloyd’s Asia unit

Lloyd’s re/insurer MS Amlin Underwriting has launched a reinsurance sidecar in Singapore to provide collateralised capacity to support Syndicate 2001’s Asia reinsurance portfolio.

MS Amlin Asia Pacific (MS AAP) worked in conjunction with the Monetary Authority of Singapore (MAS), Lloyd’s Asia and Hong Kong based ILS specialist ILS Advisers, to establish the landmark special purpose reinsurance vehicle, Phoenix 1 Re, which is said to be the first locally issued ILS to provide capacity to a local cedant, solely focused on
the Pan-Asia region.

Phoenix 1 Re has secured $42 million of collateralised capacity, with alternative capital providers now able to access MS AAP’s regional portfolio, spanning over ten territories and specifically excluding key peak perils, including Japan and Australasia. Approximately half of the capacity was supported by Asia based investors or fund managers.

Phoenix 1 Re will allow the company to provide better products and services to its clients and partners locally and to introduce new alternative capital sources to help reduce the region's protection gap.

Will Ho, chief executive of MS AAP, said: “We are delighted to have secured funding for Phoenix 1 Re. Through the creation of a remote risk facility, which caters to regional business, MS AAP will now be able to leverage larger capacity that we can deploy to our core clients on their reinsurance programmes as demand and growth increases in Asia. Phoenix 1 Re is an important long-term strategic initiative for MS AAP as we continue to seek ways to build capacity and relationships with capital market partners, and we are grateful for the support received from MAS, Lloyd’s Asia and ILS Advisers in establishing the vehicle.”

Pavlos Spyropoulos, chief executive of Lloyd’s Asia, said: “The launch of MS AAP’s ILS vehicle is an important milestone in the Lloyd’s Asia platform’s growth story and evolution, setting a new paradigm for how capital can leverage the underwriting expertise we have developed in Singapore to access Asia Pacific business through Lloyd’s. The faith Phoenix 1 Re’s investors have placed in MS AAP is an endorsement of their strong underwriting capability, and of the value proposition of our platform in Singapore that enables local access to Lloyd’s unique licence network, financial security, expertise, and brand.”

Tim Yip, ILS advisers, said: “We are delighted to have been able to support MS Amlin, MAS and Lloyd’s Asia in what we truly believe to be a very important step in the continued development of the Asia ILS market. Phoenix 1 Re finally allows ILS investors to gain access to the regions diversifying perils and exposure in a way that is specifically catered to alternative capital provider’s differentiated risk appetites and requirements, and through an underwriting team that has shown consistent success in navigating a very diverse region. As a completely new and unique transaction, this further shows the growth and experience that the local region has gained over the past 2 years, in being able to efficiently facilitate these transactions.”

Lim Cheng Khai, executive director, MAS, said: “MAS welcomes the launch of Phoenix 1 Re, the first pan-Asian catastrophe bond that covers multiple natural catastrophe perils across more than 10 countries. Phoenix 1 Re has a unique structure that accommodates different policy renewal and inception dates within its underlying portfolio of Asian risks, which makes it attractive to a wider pool of insurance linked securitisation (ILS) investors. Phoenix 1 Re is also the 10th catastrophe bond issued in Singapore, and bears testament to MAS’ continuing effort to grow the Asian ILS market and facilitate the use of innovative ILS structures to narrow the protection gap in Asia.”