Leadenhall backed Nectaris Re plans growth, gets Allianz ART fronting

Nectaris Re Ltd., the Class 3A Bermuda-based rated reinsurance underwriting platform backed by London headquartered specialist insurance linked securities (ILS) and reinsurance related investments manager Leadenhall Capital Partners LLP is planning to expand its open market business to benefit from hard market conditions.

Nectaris Re was launched with Leadenhall backing through a Mutual Cooperation Agreement a year ago, with the relationship providing the ILS fund manager with a new rated reinsurance underwriting platform through which it can source business from the market.

AM Best has affirmed the Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a” (Excellent) of Nectaris Re Ltd. (Nectaris Re), the operating subsidiary of Nectaris Holdings Ltd., with stable outlooks for all credit ratings.

Nectaris Re’s strategy is to retrocede all of its underwritten business to Horseshoe Re II, with cells funded by insurance-linked securities funds managed by Leadenhall Capital Partners.

After a year of using the Nectaris Re relationship, its appetite is seemingly expanding, with AM Best noting that Nectaris has now established a fronting relationship with Allianz Risk Transfer (Bermuda) Limited in 2022.

Going forwards, Nectaris intends to increase its open market business, AM Best explained, saying that the underwriting vehicle aims to take advantage of the hard market, but with limited impact on its tail risk and capital.

To-date, reinsurance business underwritten through Lloyd’s Syndicate 2001 (managed by MS Amlin Underwriting Ltd.) and MS Amlin AG has accounted for the majority of total limits ceded to Nectaris Re.

With the addition of a fronting relationship with Allianz’s ART division, Nectaris Re will have additional options for how it faces off to market counterparties and this could open up even broader access to risk for the ILS capital backed underwriting vehicle.

AM Best said that it assesses Nectaris Re’s overall operating performance as adequate and this assessment is based on the historical operating results of Leadenhall-managed ILS funds, as well as the projected results of the retained tail risk, including income from ceding commissions.

So far, Nectaris Re predominantly underwrites property catastrophe reinsurance contracts, as well as some casualty and marine risk, AM Best explained.

The Nectaris Re platform appears primed to continue growing, which likely means it will provide an increasingly meaningful route to reinsurance risk for Leadenhall Capital Management’s ILS funds and investors.