Articles from April 2025

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The City National Rochdale Select Strategies Fund, a mutual insurance-linked securities (ILS) strategy focused on industry loss warranties (ILWs) and catastrophe bonds, delivered a net return of 11.77% for the year ended January 31, 2025.

While down from the 15.58% return recorded the previous year, 2024’s performance still marked a second consecutive year of strong, above-average gains for the interval-style fund.

Run by City National Rochdale, the fund combines structural customisation with tactical risk management across ILWs and cat bonds. As of the end of January 2025, total net assets reached $228.2 million, up from mid-2024 levels, reflecting continued investor interest in ILS as a source of uncorrelated returns amid broader market volatility.

“This year’s performance was the second year in a row with higher-than-average positive returns and the Fund’s sixth consecutive year generating positive, fundamentally non-correlated returns,” said Gregg Giaquinto, President of City National Rochdale.

According to Giaquinto, the fund’s defensive positioning ahead of a hyperactive 2024 hurricane season played a key role. Portfolio construction focused on more risk-remote attachment points and custom structures designed to reduce the risk of impairment from a single event. Exposure to risk was further hedged through the purchase of additional ILW protection.

“These improvements can be evidenced by the increase in loss-exposure breakeven points compared to past years,” Giaquinto explained. “The dynamic risk positioning exemplifies the ability to moderate through prudent underwriting and highlights the customizability of the ILW product.”

While catastrophe bond allocations were more modest in the portfolio, the fund still benefited from a record second year of primary market issuance in the cat bond space. However, the lighter weighting meant the fund slightly underperformed the Swiss Re Cat Bond Index, which returned +14.41% over the same period.

Even so, the Select Strategies Fund outpaced traditional cash proxies like the ICE BofAML 3-month U.S. Treasury Bill Index, which returned +5.19% for the year ended January 31st 2025.

It’s worth noting that this performance comes amid a strong overall year for the ILS market, which has seen continued investor demand, particularly for cat bonds and ILWs offering attractive risk-adjusted yields and structural clarity.

“The Fund’s portfolio construction process for 2025 is now well underway, and we are focused on diversification and capital-efficient opportunities in the ILW and Cat Bond markets, where we believe risk-adjusted returns are most attractive,” Giaquinto added.

“We are excited for the opportunity to further capitalize and source attractive opportunities for our shareholders in the coming months.”

Rochdale ILW & cat bond fund returns 11.77% with only modest catastrophe impacts was published by: www.Artemis.bm
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Acrisure Re, the reinsurance broking division of global firm Acrisure, has made some key hires in Bermuda, taking Roman Romeo, who joins the company as Head of Acrisure Re Bermuda, as well as Barry Gordon, a specialist in broking industry-loss warranty (ILW) instruments, from rival Aon.

Roman Romeo has been appointed as President, Head of Acrisure Re Bermuda, effective April 7th.

Based in Bermuda, Romeo will report directly to Michael Cross, President, Acrisure Re North America.

His hire represents a win for Acrisure Re, as the reinsurance broker has taken Romeo from a senior Bermuda leadership role at Aon.

Romeo became the chief executive officer (CEO) of Aon’s Bermuda Reinsurance Solutions unit just one year ago.

Prior to that, he was the Executive Managing Director, Wholesale Treaty for Aon Reinsurance Solutions in Bermuda.

At Acrisure Re, Romeo will have a mandate to scale the reinsurance broking business in Bermuda for the firm, while enhancing client service and building out the team on the island.

The company expects Romeo’s appointment will accelerate its ambitions to build-out a leading Bermuda reinsurance broking operation.

In addition, Acrisure Re has also hired Barry Gordon from Aon, who joins the company as Senior Vice President, ILW, effective April 15th.

Gordon is also based in Bermuda and will report to Romeo and lead Acrisure Re’s ILS trading capabilities, as part of an index-based product suite.

Gordon was most recently Vice President, ILW at Aon in Bermuda and he brings significant expertise in industry-loss warranties (ILWs), alongside broader experience in broking retrocession and reinsurance opportunities.

Simon Hedley, CEO, Acrisure Re Group, said, “The hiring of Roman represents a major milestone in Acrisure Re’s commitment to expanding its footprint and deepening its influence in the Bermuda market. His industry expertise, leadership acumen, and deep-rooted relationships on the Island will open countless doors and drive enormous value for our clients and partners.

“With Barry also joining the team, we are building a world-class platform that will firmly cement Acrisure Re’s standing in the market.”

Paul Scope, CEO, Acrisure Bermuda, added, “Bermuda remains an important market, and Acrisure’s decision to further invest here is both strategic and important.

“Roman’s appointment, alongside Barry’s, is a powerful signal of our intent to grow thoughtfully and meaningfully. I look forward to working alongside them and seeing the impact they will make in the months and years ahead.”

Romeo further stated, “Bermuda continues to play a critical role in the global reinsurance landscape, and I’m pleased to be joining Acrisure Re at a time of strategic focus on the Island. The existing team has strong expertise, and I look forward to collaborating with them—and with Barry—to strategically grow the portfolio and provide clients with tailored, analytics-driven solutions.”

Acrisure Re hires Romeo & ILW specialist Gordon from Aon in Bermuda was published by: www.Artemis.bm
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Artemis has learned from sources that the vast majority of principal from insurtech Kin’s $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond is expected to be returned to investors at the upcoming risk period end, while just $5 million will be retained with an extended maturity date to cover any potential loss development.

The Hestia Re 2022-1 catastrophe bond had been exposed to possible losses due to the impacts of hurricane Ian, the largely Florida storm from later in that year of issuance.

Initially after hurricane Ian’s landfall, given the Florida wind focus of this insurance-linked securities (ILS) transaction and the reinsurance protection it provided to sponsor Kin, the $175 million of Hestia Re 2022-1 cat bond notes had been marked down to bids of less than 10 cents on the dollar on some secondary cat bond sheets.

There was, however, a relatively wide-dispersion in the views taken by secondary cat bond trading desks.

In an update we reported that, after hurricane Ian, some pricing sheets had the Hestia Re 2022-1 notes marked for bids as low as 5 cents on the dollar, others still had them marked only 20% down, while one still held them at a mark of 92.

As we also explained at the time, in October 2022, Kin’s reinsurance from the Florida Hurricane Catastrophe Fund inured to the benefit of these Hestia Re 2022-2 cat bond notes, which effectively lifted their attachment point, on a gross loss basis.

As a result, it was challenging for secondary market broker desks and for us to really understand just how exposed the notes were at that time, which likely drove the wide-dispersion in marks in cat bond pricing sheets at that time.

In early 2023, Kin revealed that it ceded around 97% of its gross losses from hurricanes Ian and Nicole in 2022 to its reinsurance capital partners.

At that time, the Hestia Re 2022-1 cat bond notes were marked down still on pricing sheets, for bids of between 70 and 80.

The pricing of the notes continued to recover over-time, resulting in them being marked down for bids in the low to mid-90’s as recently as the first-quarter of 2025.

However, with the scheduled maturity for these notes due later this month, we’ve now learned that out of the original $175 million of principal from the Hestia Re 2022-1 cat bond notes, the majority is now set to be returned to investors holding them.

We’re making the assumption that hurricane Ian has been the only catastrophe event in the risk period for these notes that was seen as a threat for possible attachment of the cat bonds’ coverage. As Kin’s losses from the 2024 storms Milton and Helene were seen to have far lower impacts on the company.

We’re told by sources that $170 million, so some 97% of the outstanding principal, is now expected to be returned to investors, with just the remaining $5 million now set to face an extension of maturity.

Given the notes are marked below 95 across the majority of pricing sheets we’ve seen, it suggests a return of capital greater than the price suggests, which investors will welcome.

For Kin, this likely means the insurer now has much greater clarity of its potential ultimate loss from hurricane Ian (again, presuming that is the event of relevance), giving it the confidence to return the capital and only extend maturity for a 3% sliver of the outstanding notes.

That extension of $5 million will allow Kin some room to make a recovery still, should its losses creep any higher and attach the Hestia Re 2022-1 catastrophe bond notes.

We understand the remaining $5 million of notes will have their maturity date extended for four years, up to April 2029 and the $170 million is expected to be returned to investors after the final risk period ends later this month.

It seems reasonable to assume Kin will have clarity to make a recovery, or return some more of the principal, in advance of that long extension date.

You can read all about the Hestia Re Ltd. (Series 2022-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.

Details of catastrophe bonds facing losses, deemed at risk, or already paid out, can be found in our cat bond losses Deal Directory here.

Kin’s Hestia Re 2022-1 cat bond to repay $170m majority of principal back to investors was published by: www.Artemis.bm
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The lawsuit filed by Porch Group against broker Gallagher Re regarding the Vesttoo reinsurance letter of credit (LOC) collateral fraud has been dismissed with prejudice by the Texas court. But Porch has said it intends to continue to pursue recourse in the matter.

Porch Group is the owner of insurer Homeowners of America Insurance Company (HOA), a company that particularly affected when the Vesttoo reinsurance letter of credit (LOC) collateral fraud caused financial impacts to the firm.

Porch had filed a lawsuit against broking group Arthur J. Gallagher, claiming its reinsurance arm Gallagher Re had “grossly mismanaged” the administration of a reinsurance arrangement subject to collateral posted by Vesttoo that turned out to be fraudulent.

As we later reported, Gallagher responded to the lawsuit and the complaint made by Porch, urging the Texas court to dismiss the petition “in its entirety and with prejudice.”

Porch had then responded, rejecting broker Gallagher’s motion to dismiss the legal case, saying it believed the company had failed to satisfy the obligations of their contract.

In a judgement filed this week, it was “ordered, adjudged, and decreed that this action and all claims by Plaintiff Porch.com, Inc. against Defendant Gallagher Re Inc. are dismissed with prejudice.”

The judgement also decrees, “That Plaintiff take nothing against Defendant; that all relief not granted is denied unless applicable law allows a party to seek some type of postjudgment relief; and that all allowable and reasonable costs are taxed against Plaintiff.”

Referring to arguments made by Gallagher Re in its motion to dismiss the case, the order concludes that the sole breach of contract claim made by Porch against the broker is dismissed with prejudice, while a contact claim against the broker’s parent AJG is denied as moot, as AJG had been voluntarily dismissed from the action.

So closes another chapter in the Vesttoo saga.

In response to an Artemis enquiry to the companies, a Porch spokesperson said, “We will continue to vigorously pursue recourse in this matter, including via all available legal and other processes,” while Gallagher Re declined to comment.

Whether Porch continues to pursue Gallagher Re specifically remains to be seen. But the company is persisting in its efforts to recover more of the value it lost and damages it suffered due to the Vesttoo letter of credit collateral fraud from other avenues.

As a reminder, Porch recently secured a $7.1 million settlement over constructive trust claims with the Vesttoo Creditors Liquidating Trust in relation to so-called constructive trust claims linked to a reinsurance transaction.

The insurer continues to pursue a court case against China Construction Bank, claiming its staff were complicit in the reinsurance collateral fraud, as well.

Read all of our coverage of news related to the fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo reinsurance deals.

Porch complaint against Gallagher Re over Vesttoo fraud dismissed with prejudice was published by: www.Artemis.bm
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