Nephila Capital funds Lloyd’s new Syndicate 2358

By Joy Dumasia

Lloyd’s announced that investment manager Nephila had funded its newly launched Syndicate 2358, which focuses on short to medium term business lines, with capital provided through London Bridge Risk PCC (LBR PCC). The new transaction provides reinsurance capital from diverse investors, including four pension funds, to support underwriting beginning with the 2022 Year of Account.

Nephila has been active in the insurance-linked securities (ILS) market for over twenty years and at Lloyd’s for nine years. Using LBR PCC to channel this investment now brings part of its investment activity onshore in the UK.

In addition to this transaction, Lloyd’s confirms that Ontario Teachers’ Pension Plan (Ontario Teachers’), who was announced as the first investor to use LBR PCC in November, has recently provided a second tranche of capital via LBR PCC to cover additional risks in 2022.

The PCC operates under the UK Risk Transformation regulations and provides an access point for both UK and international investors, including Insurance-linked Securities (ILS) investors, to deploy funds in a tax transparent way into Lloyd’s market. Lloyd’s members can use this vehicle to manage their capital requirements by attracting new classes of investors, including pension funds. They will benefit from reduced set-up times and lower transactional costs.

Burkhard Keese, CFO, Lloyd’s, said: “I am again delighted to see LBR PCC being used to support further ILS investments at Lloyd’s and to welcome such a prevalent ILS Investor as Nephila to the platform. This underlines the importance of this initiative to the Lloyd’s marketplace and shows there is real momentum behind ILS support of Lloyd’s, which is great to see.”

Adam Beaty, Nephila Syndicate CEO, said: “Using the LBR PCC structure was an efficient way to bring our investors’ capital into Lloyd’s to back our new syndicate. It is encouraging to see an initiative like LBR PCC being introduced to the market by Lloyd’s, and we are pleased to have had the opportunity to support it.”