ILS Intelligence
START-UPS DEMONSTRATE ILS DEMAND
The formation of a new fund and a new legal group has once again revealed the market’s sustained appetite for insurance linked securities.
European reinsurer SCOR and is dedicated to insurance risks. François de Varenne, chief executive officer of SCOR Global Investments and SCOR Alternative Investments, believes that the new fund offers a good deal for investors.
T “The Atropos fund enables investors to
benefit from all the experience of SCOR, fifth-largest reinsurer in the world, in terms of market access, pricing capability and risk management,” he says. “For SCOR, the launch of this fund cements its entry into third-party asset management, which was one of the initiatives announced as part of its strategic plan, Strong Momentum.”
The new ILS legal group has been set up
by law firm Walkers Global to offer advice to clients in a number of areas, including alternative risk transfer arrangements such as
he new insurance
linked securities (ILS) fund, Atropos, has been set up by
catastrophe bonds, reinsurance sidecars and securitisation vehicles.
The group is made up of dedicated, multi- jurisdictional lawyers based in the firm’s Dublin and Cayman Islands offices and will be able to provide expertise on legal and practical aspects of trading, financing and securitising risk involving Cayman Islands and Irish entities, including cash and synthetic catastrophe bonds, captive insurers, sidecars and life settlement transactions.
“With limited capacity in the insurance and reinsurance industry to underwrite new risks and with important regulatory changes regarding capital requirements underway in the form of Solvency II,
insurers says Garry Ferguson, partner
increasingly looking to alternative channels to raise capital in order to cover catastrophic risks,”
Walkers’ Dublin office.
are in
AS A LEADING PROVIDER OF COLLATERAL TRUST SERVICES FOR THE INSURANCE LINKED SECURITIES MARKET, YOUR WELLS FARGO ILS TRUST TEAM IS PROUD TO SPONSOR ILS INTELLIGENCE.
collateralise ILS, reinsurance and captive programmes worldwide. The cost savings realised by our clients using the WF Trust in lieu of letters of credit (LOCs) is staggering.
O There are many benefits to using the WF Trust in lieu of LOCs to
collateralise such programmes. They include: • Saving between 80 and 98 percent of LOC fees • Keeping corporate credit lines available • Retention of the interest income of assets held in trust • Retention of ownership of the assets in trust • Ease of set-up and renewal
The trust concept is simple. Rather than posting a letter of
credit as collateral, our clients deposit cash or cash equivalents (the same cash that they would likely use to collateralise an LOC) into
ver the past 10 years, the Wells Fargo ILS and Reinsurance Trust group has established billions of dollars of trusts used to
a legal trust account where the depositor ‘owns’ the money and the transformer (for ILS deals) or cedant (for reinsurance) is the beneficiary of the trust. From a regulatory and carrier perspective, this satisfies the collateral requirement.
The Wells Fargo ILS and Reinsurance Trust team has the well-
deserved reputation as the most knowledgeable and responsive trust group in the industry. So if you are posting LOCs for ILS, reinsurance or captive programmes, or if you are finding your current trustee less than ideal, consider using the ILS or Reinsurance Trust, and please consider Wells Fargo as trustee.
For more information, please contact Robert Quinn on: Tel: +1 203-293-4394 Email:
robert.g.quinn@wellsfargo.com Website:
www.wellsfargo.com/insurancetrust
42 | INTELLIGENT INSURER | October 2011
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