Winner: RenaissanceRe

RenaissanceRe has won the Credit Insurer of the Year category in SCI’s CRT Awards, following another year of growth and achievements. The Bermuda-based reinsurance firm consistently impressed and continues to stand at the forefront of innovation in the capital relief trades industry. 

Building on close to 30 years of experience and industry leadership in reinsurance solutions, the firm assumes risk on an unfunded basis, complementing cash market participants. RenaissanceRe works primarily with insurance companies (both diversified and monoline), banks and government agencies across the globe to match its capital with risk.

Offering first-class advice and products, the firm targets clients who are considering new and innovative risk transfer programmes. The credit business includes trade and financial credit, surety bonding, political risk, project finance, mortgage and bank capital solutions. Furthermore, the firm’s geographical span and reach continues to grow, having transacted with multiple banks across Europe and Asia. 

“The SRT market has definitely gone back to being healthy, buoyant and busy. What sets us apart in this market is our innovative and distinctive problem-solving approach. We have structured deals on different layers within the capital stack, writing equity and junior mezz tranches, with various features (sequential/pro-rata amortisation; back book with or without ramp-up features/replenishment, etc),” notes Fiona Walden, svp and global head of credit at RenaissanceRe. 

She adds: “We have also completed trades on a bilateral, ‘club deal’ and broadly syndicated basis, and have participated alongside both unfunded and funded investors. We not only write a geographically diverse portfolio, but also an asset-class diverse portfolio, completing transactions across large corporate loans, SME loans, income-producing real estate, residential real estate and capital call facilities.”

Walden also emphasises RenaissanceRe’s institutional and technical investment in the credit team. “We possess an in-depth understanding of the transactions, which stems from a broad base of talent and expertise within the team. We made the decision to invest heavily in the credit team through resources and tools.”

She continues: “We have grown substantially as a broader portfolio over the last few years and also within SRT, demonstrating the support of our executive management and RenaissanceRe’s integrated system. This means we can deliver an educated view to our clients and make sure we have a two-way feedback loop with them as to what we think of a particular risk, inevitably allowing us to have superior risk selection and deliver efficient execution to clients. In the current ever-changing economic conditions, this deep understanding of risk will be imperative.”

The team includes former tax attorneys, investment bankers, software developers, actuaries and reinsurance and claims expertise. Such multifaceted expertise within the team brings different perspectives to the table when collaborating to solve risk challenges.

The firm further boasts a leading position in the US structured credit sector, specifically the private mortgage insurance credit risk transfer space, with a market share twice that of its closest competitor. Such prime market position and eminence is key in a growing jurisdiction for CRT.

“When we look at our overall book, we are market leaders in mortgage CRT in the US, being the largest reinsurer of US private mortgage insurers. Our hope is that we can build on this momentum in the US and SRT gets to a point of being in favour and being invaluable to US banks,” Walden notes.

Additionally, year-to-date, the firm has deployed significant credit risk transfer limit to the GSEs and represents a top three market for the GSEs. 

Moving forward, as the SRT market becomes more mature and stable, the firm believes the market for non-STS transactions will remain sizeable. “It is a very valuable tool for banks to have; however, we are not at a stage where all transactions bear the STS designation. In an ideal world, there would not be this distinction with an STS between unfunded and funded; however, we are not seeing it as an obstacle in our ability to transact with our clients,” Walden concludes. 

Honourable mention: Liberty Specialty Markets (LSM)
LSM started focusing on CRT transactions over five years ago and over the last 12 months has had its largest capacity deployment period. Transactions closed across various asset classes (including SMEs, large corporate and CRE) and attachment points (including junior mezz), all of which represents LSM’s contribution to the development of CRT market. LSM has reached many milestones over this awards period, from aggregate capacity deployed to new structures, and continues to develop further solutions that will aim to help CRT issuers going forward.

For the full list of winners and honourable mentions in this year’s SCI Capital Relief Trades Awards, click here.