Sector developments and company hires

Lloyd’s has received regulatory approval from the UK PRA and FCA to set up a second Protected Cell Company (PCC), which provides a broadened range of ILS-related capabilities and enhanced accessibility for investors. Following the success of London Bridge Risk PCC (LBR) (SCI 10 February 2021), the new Lloyd’s vehicle is called London Bridge PCC (LB2) and will enable Lloyd’s members and managing agents to manage their capital and risk management requirements by attracting new sources of capital and reinsurance protection in a tax transparent way.

LB2 is authorised to undertake three additional capabilities. For a corporate member, in addition to writing quota share reinsurance, it will be able to write excess of loss coverages.

For a syndicate, it will be able to provide collateralised reinsurance, on both an excess of loss and quota share basis. Finally, for all structures, it will be able to fund the reinsurance obligation through the offer - by the segregated cells of the PCC - of either preference share or debt securities.

Working closely with the PRA and FCA, Lloyd’s says it has developed a set of mandatory terms for the principal transaction documentation with the aim of providing greater commercial flexibility while maintaining regulatory compliance. This is embodied in a Scope of Permissions that enables new cells to be set up and reinsurance written without the need for any additional regulatory approval.

The insurance management services for LB2 will be provided by Artex Capital Solutions. 

In other news…

EMEA

ARC Ratings has appointed a new head of methodologies – Lisa Macedo. The ratings group welcomes Macedo to help build upon its expanding capabilities in structured finance, FIs, and corporate ratings. Macedo joins the firm from Moody’s where she was responsible for the analysis and primary ratings across pan-European CMBS, RMBS, and ABS, while also overseeing the surveillance of a range of structured finance rating portfolios. Macedo has maintained several senior roles over the past 20 years at both Moody’s and Merrill Lynch in London.

North America

Swiss Re has launched a new insurance-linked investment advisory business – Swiss Re Insurance-Linked Investment Advisors Corporation (SRILIAC). The advisory company and wholly owned subsidiary will offer a range of investment management services to institutional investors, with an emphasis on catastrophe bonds. As an SEC registered investment adviser, SRILIAC will allow investors the opportunity to access Swiss Re’s proficiencies in catastrophe bond investments, natural catastrophe modelling, and underwriting. SRILIAC will complement Swiss Re’s broader investment strategy targeted towards natural catastrophe reinsurance contracts managed by SRILIM, Swiss Re’s insurance-linked investment management business.