Bridge Re formed to offer retro cat capacity
Bermudian reinsurer Bridge Re, which is wholly owned by investment bank Dresdner Kleinwort, is set to provide a further $182.5mn of securitised capacity to the property catastrophe retrocession market.
It is also the latest securitisation-style intitiative to come out of a reinsurance broker in recent months following initiatives by Gallagher Re, RK Carvill and Guy Carpenter.
Dresdner and London market broker Alwen Hough Johnson Ltd (AHJ) have successfully closed a $182.5mn three-year bond issue through a Cayman Islands company, Puma Capital Ltd. The proceeds will be used to finance Bridge Re.
Bridge Re will offer cedants a range of ultimate net loss (indemnity) products covering their property catastrophe retrocession exposures on a fully collateralised basis. The emphasis will be on peak zone exposures where capacity has been in shortest supply.
AHJ executive, Peter Butler, will be an underwriting consultant to Bridge Re. Butler has 25 years’ experience in analysing and underwriting property catastrophe retrocession business with Kiln, St Paul Fire & Marine and Hannover Re.
Hugh Price, chairman of AHJ, commented: “Peter Butler has worked very closely with Standard & Poor’s and with skilled technical and marketing people at Dresdner Kleinwort to create this unique structure. At AHJ, we have been very concerned at the shortage of capacity in the property catastrophe retrocession market, and the consequent limited options available to our clients. By establishing Puma Capital Ltd, we have taken direct action to alleviate some of the problems in that market.”
Legal firm Norton Rose advised Dresdner Kleinwort as arranger and Bermudian reinsurer Bridge Re on the Puma bonds and securitisation financing.
Maria Ross, partner, Norton Rose commented: “The Puma Notes effectively securitise the risk of catastrophe business from a number of different cedants. Many other classes of insurance and reinsurance business are capable of being securitised in this manner and we are delighted to have worked with Dresdner and Bridge Re in what we understand to be the first deal of its kind in this sector.”