Fleming Reinsurance (Fleming Re), a Bermuda-based class 3A insurance company, has established a custom reinsurance facility with BevCap P&C Protected Cell (BevCap).
The facility will provide BevCap’s members to eliminate seasoned risks by providing full economic and legal finality and on an annual basis.
The single flexible structure provides for annual recurring novations under a clearly defined mechanism that provides certainty on pricing and transaction timing for group members.
It will assume BevCap’s workers’ compensation, general liability, automobile liability and auto physical damage liabilities.
BevCap will benefit from an ongoing solution that will provide capital releases, full finality and pricing certainty on future run-off transactions.
In addition, Fleming Re stated that due to the current market disruption and our reputation as a run-off provider, it’s seeing increased demand and will complete several more transactions over the coming months.
Commenting on the new facility, Eric Haller, CEO of Fleming Re, said: “Fleming Re continues to focus on providing innovative solutions to the run-off industry that are specifically designed to achieve our counterparty’s goals.”
He explained: “Although a facility with recurring transactions is not necessarily a new concept, Fleming Re has developed a product with a repeatable algorithm to provide counterparties with unusual pricing certainty for future policy years which in turn provides managers and group members the ability to better optimise their programmes. The structure itself creates efficiencies for both parties and will streamline the transaction process in future years.”
“Our structure can be incorporated at the onset of any new captive/entity formation to give counterparties a definitive exit path from their liabilities,” Haller added.
A BevCap spokesperson noted: “Fleming Re, aware of our leading position in the group captive space, came to us with this novel approach to optimising our programmes, and the benefits to the captive was immediately obvious. Together we were able to develop a solution to
meet our goals on legacy liabilities. Fleming’s focus on alignment of interests was key. We look forward to this ongoing relationship with Fleming Re and wouldn’t be surprised to see others in the industry starting to implement similar models.”
