Aeolus launched Florida-focused Corbel facility at 6/1 renewal

Aeolus Capital Management Ltd., the Bermuda based reinsurance and insurance-linked securities (ILS) focused investment fund manager, has raised institutional funds, launched, and deployed a new Florida-focused facility named Corbel at the 6/1 renewals.

Artemis has learned that Corbel is largely focused on providing reinsurance capacity to Florida cedents, as well as some with additional risk in the other coastal US wind-exposed states.

The move was driven by a market opportunity as improvements in reinsurance rates, as well as terms and conditions, have made certain underwriting opportunities more attractive than they have been perceived for years.

Florida’s reinsurance renewals were of course characterised by higher rates in a hardening market environment, as some traditional and alternative or ILS capacity pulled-back from the state, while demand remained relatively stable.

With numerous Florida focused carriers struggling to fill their reinsurance towers this year, additional capacity from players like Aeolus, with this new Corbel facility, may well have been instrumental for some in securing their go-forwards ability into the wind season this year.

We’re told Corbel was funded by institutional investor partners of Aeolus, and the entire raise was deployed at or around the Florida 6/1 reinsurance renewal.

Sources said that Aeolus noticed a gradual risk-adjusted improvement in certain opportunities in Florida, thanks to higher pricing and stricter terms and conditions, such as the introduction of more named peril specific covers, as well as an opportunity to get paid upfront for premiums through new schedules.

The understanding is that certain Florida reinsurance opportunities were seen as more attractive in 2022 due to their structure, pricing, and terms, on a relative basis, than they have been for a decade, or perhaps more.

Which presented an opportunity for Aeolus to put together a new dedicated facility for the Florida market, helping to fill some gaps in capacity and help cedents in getting through the challenging renewals this year.

We’re told that the Corbel facility from Aeolus wrote exclusively single-shot occurrence covers that largely incepted on June 1st, with no reinstatements, some of which was reinsurance premium protection (RPP) limit.

It’s said that the Corbel offering from Aeolus was well-received by both cedents and brokers, who no doubt found the additional availability of capacity important at these mid-year reinsurance renewals