Global managing general underwriter (MGU) Victor Insurance Managers has announced the introduction of a third-party capitalized reciprocal insurance exchange.
Referred to as Victor Insurance Exchange (Victor Exchange), the new exchange will provide Victor subsidiary International Catastrophe Insurance Managers’ (ICAT) current and future policyholders with new US property catastrophe offerings.
ICAT will act as the sole managing general agency and will use its subsidiary Boulder Claims to serve as the third-party claims administrator.
Owned by Victor Exchange’s policyholders, the exchange receives capitalization from a mix of surplus notes, member surplus contributions along with retained future profits.
Financial services-focused private investment company Gallatin Point Capital will provide the entire initial capitalisation for Victor Exchange. The capitalisation will be delivered in the form of a surplus note.
Licensed as a domestic surplus lines insurer in Delaware, US, Victor Exchange becomes part of ICAT’s current carrier panel that delivers small commercial property catastrophe coverage in the 42 US states where ICAT has a presence.
Furthermore, ICAT will soon introduce a coastal homeowners programme to cater to policyholders in the Gulf and Atlantic coast states.
Victor Insurance Managers CEO Brian Hanuschak said: “The impacts of increasingly frequent and severe storm activity has led to significant strain on property catastrophe insurance capacity globally and, in particular, the US.
“By forming Victor Insurance Exchange, Victor and ICAT are creating a new source of capacity for agents and brokers while providing more long-term stability for our small commercial and residential policyholders.”
Victor further noted that the company or its affiliates are not offering any capital contributions and have no direct exposure to an underwriting loss in Victor Exchange.