3 January 2018EMEA analysis

Neon creates first UK ILS vehicle

Neon has created what it describes as the first insurance-linked securities (ILS) vehicle to be formed in the UK, as well as completing a $72 million collateralised quota share reinsurance transaction that will underwrite a portion of its syndicate’s business.

Neon said that NCM Re (PCC) is the first UK-domiciled protected cell company, which utilises the recently approved ILS regulations. Neon said the use of the facility will enhance its global reinsurance offering to clients.

“Successfully raising third party capital shows trust and confidence in Neon’s management team, brand and underwriting proposition,” said Martin Reith, chief executive of Neon Group. “NCM Re now provides Neon with the ability to raise third party capital to support collateralised ILS transactions where Neon can source bespoke opportunities for investors.

“Our investors will benefit from strong, data-driven risk selection and underwriting alongside a clear focus on delivering targeted returns, while we will look to increase our relevance and offering to clients. We look forward to continuing to develop our capital market presence as Neon builds on this landmark moment.”

NCM Re has raised third party capital to support the transaction, which will provide collateralised reinsurance coverage to Neon Syndicate 2468’s property treaty reinsurance and direct and facultative portfolios.