Singapore, UK seizing opportunity in alternative reinsurance market

The growth of insurance-linked securities is getting a boost from activist jurisdictions such as Singapore and London that are seeking to draw business.

The Monetary Authority of Singapore “launched the ILS grant scheme in January this year, which will fund 100% upfront issuance costs of catastrophe bonds in Singapore, up to $2 million. The aim of the scheme is to defray the frictional costs of catastrophe bonds issuances,” said Jacqueline Loh, deputy managing director of the authority, speaking at the Artemis ILS Asia 2018 Conference in July in Singapore, according to a transcript of the speech on the MAS website.

“We actually see the Asia-Pacific region continuing to be a growth area,” said Cory Anger, global head of ILS origination and structuring at GC Securities, a division of MMC Securities L.L.C., “particularly with Singapore’s efforts in helping front some of the costs associated with doing ILS-related transactions.”

French reinsurer Scor S.E. became the first company to take advantage of insurance-linked securities rules recently introduced in London with its Atlas Capital UK 2018 catastrophe bond in May, according to Aon Benfield.

The bond secures $300 million of retrocessional reinsurance protection over a four-year term against U.S. named storms, U.S. and Canadian earthquakes, and European windstorms, Aon Benfield said.