Flood Re Set to ‘Layer Up’ on Cat Bonds Amid Hedge Fund Demand

Britain’s ultimate backstop against flood-related losses is planning to rely more on the capital markets, after its first ever catastrophe bond drew a lot of interest from specialist investors including hedge fund Fermat Capital Management.

Flood Re, a state-backed insurance program, now plans to “layer up” on cat bonds, said Chief Executive Officer Perry Thomas. The goal is to create a pipeline of bonds that would follow a model used by Pool Re, the UK’s terrorism reinsurance program, he said.