News Middle East06 Jan 2021

Turkey:Nexus facilitates first structured MTPL reinsurance deal

| 06 Jan 2021

Leading independent specialty Managing General Agent Nexus Group has announced that Labuan-based Nexus Structured Solutions has developed a groundbreaking, 10-year structured reinsurance deal for innovative niche Turkish insurer, Koru Sigorta Anonim Sirketi, 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 significant retention of ceded premium domestically, as well as the use of profit and sliding scale ceding commissions aligning the parties' interests.

Bulent Bora, chairman of 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.

“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.”

Mr 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.”

Mr Gerard Pennefather, chairman of Nexus Structured Solutions, said, “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 nationwide 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.”

Founded in 2008 and based in London, the Nexus Group is a leading, independent, specialty Managing General Agency (MGA) group with a focus on niche insurance classes of business. Nexus employs over 280 staff and is represented in nine countries: UK, Ireland, France, Germany, Italy, The Netherlands, USA, China (Hong Kong SAR) and Malaysia (Labuan).

Based in the Malaysian Federal Territory of Labuan, Nexus Structured Solutions designs and delivers bespoke, non-traditional re/insurance programmes that help manage the volatility in ‘baskets’ of risks, often over several years, incorporating aggregate limits of liability and rewarding underwriting profitability.

Established in 2009 and headquartered in Istanbul with 11 branches nationwide, Koru Sigorta is a general insurance company in Turkey. The company mainly provides MTPL insurance products, allowing it to focus on managing the underwriting and claims processes optimally.


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