Two Credit Suisse-managed reinsurance funds will wind down because two major investors plan to stop underwriting new business. The move is the latest setback for the Swiss bank's money management unit.
Two reinsurance vehicles that Zurich-based Credit Suisse pours investor money into are gradually winding down, the Swiss bank said in an emailed statement on Thursday. The move was sparked by reinsurers Kelvin Re and Humboldt Re, which get funding from Credit Suisse via insurance-linked securities. The two firms will stop writing new policies.
«Due to independent strategic decisions by the two ultimate institutional investors this year, these entities will discontinue to participate in reinsurance activities for 2021,» a spokeswoman for Credit Suisse said.
It isn't clear who the institutional investors behind the two Guernsey-based reinsurers is; according to «Bloomberg,» which first reported the move, Kelvin Re is funded by Abu Dhabi's sovereign wealth fund.
Unit Revamp
The surprise move is the latest change at Credit Suisse's money management arm, following a hefty write-down for York, unwinding a controversial Softbank tie-up, and quietly folding a quant unit. The unit, dwarfed by flagship wealth management activities and by an investment bank, is in the midst of a strategic review.
The Swiss bank said its insurance-linked securities activities «continue to have a strong and broad market access to rated and collateralized reinsurance across all major market.» Humboldt and Kelvin's decision to stop underwriting new policies doesn't affect Credit Suisse's investment capabilities or fund platform, it said.
