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Neon launches NCM Re Ltd., seeding ILS presence in London

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Neon Underwriting Ltd. has launched NCM Re Ltd. to issue insurance-linked securities in the UK, the company said in a statement Wednesday, the first such “protected cell company” in the country, according to the company.

The UK recently approved regulations enabling the creation of such “cell companies” and designed to make the London market more of a center for ILS activity in hopes of rivaling Bermuda and similar centers for a larger part of a growing business.

The new unit’s first deal was a $72 million collateralized quota share reinsurance transaction on Jan. 1, 2018, to underwrite a portion of Neon Syndicate 2468’s property treaty reinsurance and direct and facultative portfolios, the statement said.

NCM Re Ltd. is capitalized with third-party capital, according to Neon, and “will use a range of catastrophe modeling and pricing techniques to leverage Neon’s strong underwriting and risk-selection skills to source business for third-party investors,” the statement said.

“Successfully raising third-party capital shows trust and confidence in Neon’s management team, brand and underwriting proposition,” Martin Reith, Neon group chief executive, said in the statement. “NCM Re now provides Neon with the ability to raise third-party capital to support collateralized ILS transactions where Neon can source bespoke opportunities for investors.”

“We look forward to continuing to develop our capital market presence as Neon builds on this landmark moment,” Mr. Reith added.