Speaking this morning in Monte Carlo executives from global reinsurance firm Hannover Re said that the Vesttoo issues with allegedly fraudulent letters of credit (LOC) is an “eye opener” but not systemic and they see no impact to their own pipeline of business in the insurance-linked securities (ILS) market.
Hannover Re has an expansive range of activities in the ILS market, including its own retrocession program, as well as fronting and risk transformation for ILS funds and investors.
With the Vesttoo issue weighing on executives minds at the Rendez-Vous de Septembre event in Monte Carlo this week, Hannover Re’s executive team were asked about it at a briefing held this morning.
Member of the Executive Board Silke Sehm, who has responsibility for catastrophe XL, structured reinsurance, insurance-linked securities (ILS) and retrocession at Hannover Re, said that she sees this as an external issue to the ILS market.
“This is, for me, not an ILS problem, rather an LOC topic. We don’t see the influence on the ILS market, in general,” Sehm explained.
Hannover Re CEO Jean-Jacques Henchoz further stated that he does not believe the Vesttoo issues will have any systemic effects for the market.
As a result of which, Hannover Re has not noticed any changes in market appetite, it seems.
“We don’t see any difference in terms of confidence and pipeline, when it comes to our own pipeline, zero impact. This is not entirely relevant to our own business,” Henchoz stated.
But adding that, “Certainly, this an eye opener for the industry.
“But I don’t see any systemic topic related to these individual companies.”
Read all of our coverage of the alleged fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo deals.