Lloyd’s announces plans to expand London Bridge 2 ILS – Artemis.bm

Lloyd’s of London today announced the expansion of the London Bridge insurance-linked securities (ILS) platform, with a plan to receive more capital, new types of exit reinsurance and making the acquisition of different types of risks for capital market capital easier.

Called London Bridge 2, according to the Financial Times which was given exclusive access, Lloyd’s will announce what it believes is a major step that will allow it to meet the mandate of insurance-linked insurance (ILS).

Lloyd’s launched its first insurance-linked vehicle (ILS) a year ago and the formation of London Bridge Risk PCC Ltd.

Since then, the scheme has been used to support a number of Lloyd’s underwriting funds, including Canadian pension fund Ontario Teachers’ and fund management giant ILS Nephila Capital.

This amounts to only about $200 million of third-party funds being entered into the Lloyd’s market at this time.

But with the London Bridge expansion announced today, the ambition is to attract billions of dollars from capital markets investors.

The changes to be announced include the ability to enter into multi-fund contracts through the London Bridge Risk PCC, according to the FT report.

Lloyd’s has been in discussions with regulators on expanding the Scope of Permissions form the London Bridge Risk PCC for some time, as we previously reported, with the ability to deal with losses in excess of those required for recovery.

Previously all the London Bridge Risk PCC could do was join the board with a Lloyd’s member.

The announcement will also show the possibility of contracts to be supported by different types of collateral, and debt securities to be allowed to support reinsurance contracts, opening the doors to other types of investors.

This approach, allowing large investors to pledge securities they may already own as insurance collateral and ILS contracts has been the target of several ILS transactions in recent years.

“Regulatory hurdles” are also said to be on the way, possibly through an increase in London Bridge Risk permits.

Multi-loss-insurance is perhaps the biggest change in the ILS market, making it possible to interact with members registered at Lloyd’s in a similar way to multi-insurance and reinsurance, or catastrophe bonds, but with the help of a controlled vehicle. and lives in the United Kingdom.

Burkard Keese, CFO of Lloyd’s and scheduled to speak at our upcoming conference in London this September, told the FT that he sees the change as a “big step” for Lloyd’s ILS ambitions.

“Billionaires” of other types can be attracted to Lloyd’s through ILS institutions and events that they will be able to support here, and improve the game and other offshore areas.

“The speed of action is now very fast, and we are as fast as other areas can be,” Keese told the FT. “It is the speed of execution that is most important to potential investors.

Keese also explained that Lloyd’s re-closing strategy (RTC) could be the key to helping ILS investors access long-term and risk-free trades in the Lloyd’s market.

This will allow business books away from asset security risks to be stored and transferred using the London Bridge ILS, it is believed.

Lloyd’s said it has received the necessary approvals for the changes and a full announcement is expected later today.

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