Hannover Re moves forward with ILS expansion

MONTE CARLO, Monaco — Hannover Re is in advanced negotiations with investors for its planned Bermuda-based underwriting agency, Hannover Re Capital Partners, said Silke Sehm, executive board member for property/casualty reinsurance.

The facility, which it announced last month, will write nonproportional catastrophe business backed by third-party capital, she said.

“It is fee income that we are generating, and we are bridging our expertise to the capital market,” Ms. Silke said during a presentation at the Rendez-Vous de Septembre reinsurance meeting on Monday.

The reinsurer does not yet have a “concrete” projected capital figure for HCP, she said.

“The idea is to start in a typical Hannover Re way, slowly, maybe with one or two investors right in the beginning. We are currently in very good talks with one, maybe even two investors,” Ms. Silke said.

The facility will expand Hannover Re’s current portfolio of insurance-linked business, which includes life/health ILS, catastrophe bonds, collateralized fronting and cat bond investments, she said.

“We are doing it out of Bermuda because there we do all of our nat cat nonproportional underwriting,” she said.