Nephila Capital had an ambition. They wanted to establish a syndicate at Lloyds, and take advantage of the cost efficiencies, rated paper and distribution opportunities offered by the market.

For Lloyd’s, Nephila was an exciting opportunity that aligned perfectly with their strategic Vision 2025, as it would introduce new, accretive capital and bring an innovative product to the market.

And for the team from Asta, who were tasked with the job of securing Nephila’s entry to the market, helping them secure approval from Lloyd’s was a challenge to relish. But the proposition featured complexities that needed to be understood before the application could be taken seriously. The team had to use all their expertise to ensure an alignment of interests, while demonstrating an understanding of ILS and the mutual opportunities on offer.

Asta’s unique approach to success.

The Asta team’s approach to securing Lloyd’s initial support was underpinned by understanding, flexibility and skilled negotiation.

Nephila’s ownership and fund structure are highly sophisticated, and the team’s first step was to ensure Lloyd’s understood exactly how it worked. It also needed to be capable of aligning with Lloyd’s Corporate Member structure. This is where the team’s negotiation skills came into their own, and they took the highly unusual step of making a presentation to the Lloyd’s Franchise Board.

This approach had a positive outcome – Lloyd’s offered support for Nephila’s proposition – but there was still plenty of work to do. The Lloyd’s New Entrant Process had to be navigated before final approval could be granted. And this was where the Asta team proved their worth.

Knowledge and experience – the key to successful delivery.

At this point in the process, Nephila had to produce a credible business plan, and Asta’s experience of the market was invaluable. The team also helped to complete the necessary applications, provided due diligence guidance, used their technical skills to structure the deal, and resolved issues as they arose.

Once it was agreed, the deal was met with the wholehearted approval of Lloyd’s and the alternative capital model of Nephila, and the first ILS backed syndicate was successfully established.

Once underwriting began, Asta remained committed in its support of Lloyd’s and Nephila, providing oversight of individual risks until everyone was comfortable with the business being written. The team also ensured that compliance with regulations and Lloyd’s minimum standards was being met.

A positive result built on understanding.

The success of this deal was built on understanding – Lloyd’s needed to understand ILS, and Nephila needed to understand the market and its benefits. And it was in these two areas that the Asta team shone. They worked hard with both parties to understand objectives, and brought them together as they structured the deal.

As a result of our work with Nephila, Lloyd’s is now established as a credible, lower-cost platform to attract and develop ILS business. And through the Capital solution of Blueprint One of the Future at Lloyd’s strategy, new structured investment opportunities are also being created for ILS capital to enter the market more easily.

After Nephila migrated to its own independent managing agency in October 2019, they have further developed their
ILS business at Lloyd’s following the in principle approval of Syndicate 2358 in June 2020. We’ve been proud to partner with Nephila on their journey and we wish them every success in the future.