Innovative new home product to use Bermuda captive

An innovative partnership between a Bermuda broker and an insurtech on a policy that offers protection to home buyers from drops in the value of new home purchases, will use a Bermuda captive insurer.

Bermuda-based ReFlex Solutions is acting as lead broker for a US insurer offering protection to home buyers from drops in the value of new home purchases.

ReFlex founder Neville Ching, whose firm operates as a broker but also works with insurtechs coming to market, said Home Value Lock is a policy being distributed by US real estate agents. It protects homebuyers for the loss of up to 10 percent of their value if a local event such as a school or business closure occurs.

The programme uses local home value indexes down to county or town sizes to assess values, rather than depending on national or regional indexes, Ching said.

ReFlex will broker to reinsurance companies and the product differs from mortgage reinsurance, Ching said.

“It offers similar combined ratio returns of 30 to 40 percent but considerably reduced and different catastrophe loss scenarios because the coverage type is market price, not individual credit risk,” he said.

“The insurtech business behind the programme is backed by financial services and real estate businesses in the US with strong initial wholesale distribution relationships.”

Ching said the insurtech has its own Bermuda captive insurer participating with a target of more than $100 million of premium to write over the next three years.