Prospective brokers invited to tender for initial four-year contract
Flood Re has begun the search for a broker to help it buy reinsurance cover from the global market.
As part of its buiness model Flood Re will buy retrocession - reinsurance for reinsurance companies - to help cover its liabilities.
The tender put out by Flood Re invites bidders to apply for an initial four-year contract, which is extendable to up to seven years.
Flood Re plans to award the contract to the successful broker in early December 2014.
The successful broker will advise Flood Re on retrocession and/or other protection, then procure and place the cover into the market on behalf of Flood Re.
It will also provide the flood scheme with catastrophe modelling.
As such the tender is likely to prove attractive to large global reinsurance brokers such as Aon Benfield, Guy Carpenter and Willis Re, which have developed in-house catastrophe modelling capabilities.
Flood Re said it had also received a “healthy response” to its tender for a managing agent, which will be responsible for running many of the scheme’s key functions, including underwriting and claims.
The evaluation of submissions to the managing agent is being finalised, and final selection of the managing agent will take place before the end of October.
Interim Flood Re chief executive Tom Woolgrove said: “The Flood Re programme and ABI are delighted that tender documents for the appointment of the broker have been published.
“Accessing global reinsurance, to transfer risk and manage volatility, is a key part of the Flood Re business model, and by using a broker’s expertise, we hope to balance the cost effective placement of reinsurance with accessing innovative solutions.”