PRESS RELEASE: Leading independent specialty Managing General Agent Nexus Group today announces that Labuan, Malaysia-based Nexus Structured Solutions has developed a ground-breaking, ten-year structured reinsurance deal for innovative niche Turkish insurer, Koru Sigorta Anonim Şirketi (“Koru Sigorta”), covering its Motor Third Party Liability (“MTPL”) book of business with capacity provided by an ‘AA-‘ rated global reinsurer.
The deal provides Koru Sigorta with risk-based capital relief via combined retrospective adverse development and prospective quota share covers that transfer MTPL historical reserving and future underwriting risks to the reinsurer. It includes a significant retention of ceded premium domestically, as well as the use of profit and sliding scale ceding commissions aligning the parties’ interests.
Bülent Bora, Chairman of the Board, Koru Sigorta, said:
“It is a delight having concluded this deal, particularly considering the Covid-19 pandemic restrictions and the difficulties of attracting international reinsurance capacity for the MTPL book. We are grateful to both Nexus and its reinsurance partners for working with us to get this deal done and validating our business and financial model.
Whilst none of the deal features in isolation represent anything particularly novel, it is their collective use within a comprehensive structure that delivers a highly innovative and exciting solution that has widespread application across the local MTPL marketplace. From a domestic national interest perspective, the combination of accessing highly rated international reinsurance capacity and expertise whilst retaining the vast majority of the premium onshore in Turkish Lira is very compelling.”
Colin Thompson, Founder and Group CEO of Nexus, said:
“This is clearly a significant and complex agreement that has been brought to a successful conclusion for all parties concerned, and I am proud that Nexus Structured Solutions has been able to play such an important role which augurs well for similar deals to be struck in the future by Gerard and his team.”
Gerard Pennefather, Chairman of Nexus Structured Solutions, said:
“Our thanks to the leadership of Koru Sigorta and our reinsurance partners for their foresight in concluding the first Structured MTPL reinsurance deal in Turkey. The deal is a clear validation of the quality of Koru Sigorta’s underwriting and balance sheet discipline, its highly efficient and scalable business model, strong nation- wide agency network underpinned by the quality of latent talent in the business.
In addition, this deal backed by the ‘AA-‘ rated reinsurer is a testimony to the resilience and opportunities in the Turkish insurance market. What’s particularly pleasing for us is that reinsurance premiums are kept onshore in Turkey whilst risk is transferred abroad. We look forward to continuing to be at the forefront of risk transfer innovation in Turkey and our target markets elsewhere.”
Original Article at Nexus News