23 December 2020ILS

BMA approves Swiss Re SPI 1863 Re

Bermuda Monetary Authority (BMA) has approved a special purpose insurer, 1863 Re, registered by Swiss Re that will be used to underwrite business as part of its recently announced new ILS fund.

In November, Swiss Re, through its subsidiary Swiss Re Insurance-Linked Investment Management, secured authorisation from the Swiss Financial Market Supervisory Authority (FINMA) for an asset management licence for funds. With this approval, the company will manage a standalone fund company, 1863 Fund, which will allow investors a new avenue to access Swiss Re's natural catastrophe business.

The Core Nat Cat Fund, the initial fund under the newly created company, will mark the first time Swiss Re opens its natural catastrophe portfolio to investors through a permanent fund format. For investors, this move offers an easily accessible and widely accepted investment format to participate in a high-quality natural catastrophe portfolio underwritten by Swiss Re.

Martin Bisping, CEO of Swiss Re Insurance-Linked Investment Management, said: “This new fund will open a unique opportunity for investors to invest in the same book of business as Swiss Re, benefitting from Swiss Re’s global reach, client access, risk knowledge and underwriting.”

The move to attract additional alternative capital through a standalone fund company is in line with Swiss Re’s strategy to expand its natural catastrophe capacity. In 2019, Swiss Re established its Alternative Capital Partners team, specialised in creating investment partnerships with third parties through various forms, such as insurance-linked securities, retrocession, sidecars and the newly created fund platform.

John Dacey, Swiss Re’s group CFO, said: “Swiss Re has laid out a clear pathway for its Alternative Capital Partners strategy. This allows for targeted growth of our natural catastrophe portfolio, while giving investors an attractive diversifying investment opportunity in an easily accessible format. With this new fund set up, we are broadening our partnership with alternative capital providers.”

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