Hannover Re set to launch ILS platform in Bermuda

By Ashish Tiwari

Aug 21 - (The Insurer) – Global reinsurer Hannover Re is setting up a new insurance-linked securities (ILS) platform, Hannover Re Capital Partners, in Bermuda, according to people familiar with the matter.

The platform will function as an underwriting agent, operating similarly to an ILS investment manager for the German company.

It will underwrite risk using third-party capital from investors, a move expected to yield fee income for Hannover Re, the sources said.

This signals the reinsurer’s effort to expand its capital management capabilities and diversify its revenue streams amid growing investor demand for ILS products.

Hannover Re is a major player in the ILS market, providing risk fronting for catastrophe bond sponsors and converting reinsurance into collateralized opportunities for ILS fund managers and investors.

Earlier this year in May, it had sponsored a $20 million Cumulus Re II cloud outage catastrophe bond with modeling by Parametrix. In July, the reinsurer partnered Schroders Capital to pilot a tokenised approach to ILS contracts.

As previously reported, catastrophe bond issuance in the first quarter was by far the biggest Q1 on record.