Tremor Successfully Clears World’s First Programmatic ILW Trade

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Tremor opened weekly online Industry Loss Warranty (ILW) auctions to provide an active marketplace to transact coverage. While most re/insurance markets continue to remain challenged or closed entirely and while many intermediaries are calling for automatic contract extensions, Tremor is seeing rapid growth in the use of its fully online, programmatic marketplace to price and allocate re/insurance programs.

On April 2nd, Tremor opened weekly online Industry Loss Warranty (ILW) auctions to provide an active marketplace to transact coverage. While most re/insurance markets continue to remain challenged or closed entirely and while many intermediaries are calling for automatic contract extensions, Tremor is seeing rapid growth in the use of its fully online, programmatic marketplace to price and allocate re/insurance programs.

Each week, Tremor posts a range of common ILWs for auction. Interested parties submit blind, sealed bids to buy and/or sell the posted ILWs; parties are not known to each other until trade is successfully completed. Upon the close of bidding, Tremor computes a market clearing price for each ILW and reports consequent trades.

Tremor completed its second weekly auction on April 9th. Capacity offered nearly tripled with twice the number of bidders from the opening week of trade. Bidders offered $87 million of capacity equally across three structures. The US Wind and Earthquake ILW contract traded at a rate on line of 12.5% before brokerage. As previously announced, Tremor will report clearing prices and spread to the market in an effort to increase ILW transparency and to further encourage trade. The details of the most recent week’s auction results can be found below:

Tremor ILW Trading Results: 9 April 2020

ILW Cleared Trades (ROL):

$50bn US Wind and Earthquake: 12.25%

Spreads (ROL):

$30bn FL Wind: 12.00% (Buy) 12.50% (Sell)
$15bn Japan Wind: 2.75% (Buy) 6.75% (Sell)

  • Clearing Price and Spread do not include commissions and fees

Anonymized aggregate supply, showing total supply available at various prices, has been made available to markets that bid on the Tremor platform.

“The team at Tremor is thrilled to have yet again broken new ground to clear the world’s first programmatic ILW trade. In just our second week of trading, capacity tripled and the number of bidders more than doubled. The feedback we have received has been fantastic - the market has endorsed that this is how ILWs should trade and Tremor’s powerful matching engine technology is the perfect solution to enable ongoing ILW trade with capacity on demand and an efficient market clearing mechanism,” said Sean Bourgeois, Founder & CEO of Tremor.

Tremor continues to work on a number of traditional placements in addition to its continuous ILW market. As the midyear renewals approach, the company has seen unprecedented demand for its technology to enable trade.

“We are thrilled to see the fruits of our labor accelerate so rapidly. Clearing trades while contemplating rich and diverse sets of preferences is a complex computational problem to solve. Our world class team has spent the last two years building our marketplace from the ground up with these capabilities in mind. Tremor combines modern marketplace liquidity technology while maintaining traditional relationships. This is precisely what the market needs now, and will require in the future,” continued Bourgeois.

Tremor’s weekly ILW marketplace welcomes buyers of protection, their brokers and sellers of protection to trade. The Tremor marketplace includes over 80 global reinsurers from all major markets, a number of reinsurance brokers, ILS funds and direct access to capacity at Lloyd’s. The company’s unique offering supercharges trading while involving the entire trading community.

Tremor will continue to auction common ILW structures every Thursday with bids accepted from 9am ET until 9am ET on Friday. Tremor will report results at the end of the trading day each Friday to participants and report results publicly thereafter.

About Tremor: Tremor is a venture-backed insurance technology firm where world class computer scientists, economists, market designers and industry practitioners are working together to build a modern risk transfer marketplace. Tremor’s “smart market” platform incorporates intelligent market design, state-of-the-art auction technology and sophisticated optimization techniques to vastly improve how risk is transferred around the world.

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Sean Bourgeois
Tremor Technologies, Inc.
+1 203-769-7502 Ext: 700
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