2 NEWS


JLT INVESTS IN ILS CAPABILITY; SEEKS DEMOCRATISATION OF THE CAPITAL MARKETS


It has been a busy couple of months for Jardine Lloyd Thompson Capital Markets (JLTCM), part of JLT Towers Re, as it has invested heavily in entrenching a market position for itself in the rapidly growing ILS markets and has already started to reap the rewards.


In May, it unveiled a new vehicle alongside formed partners including Bermuda-


headquartered ILS specialist Horseshoe Group, which aims to make the capital markets more accessible to issuers that want smaller cat bonds.


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The launch of the platform is significant for


the ILS markets as it potentially represents a way in which the markets can diversify and bring the risks of much smaller cedants to investors. It also potentially offers investors a chance to originate more of their own risk by placing collateralised deals through the platforms.


According to JLTCM, the platform can also


easily be accessed by other brokers, allowing smaller intermediaries to offer this form of risk transfer to their clients without incurring costly start-up fees and having to invest in expensive expertise.


The first deal to be issued via the new platform was a $10 million catastrophe bond for an unnamed cedant transferring the risk on a Florida book of business. Market Re 2014-1 provides two-year indemnity-based collateralised catastrophe reinsurance coverage for the cedant.


JLTCM has stated several times that it is intent


on widening the appeal and accessibility of this form of risk transfer for its clients and the creation of this platform illustrates this.


Michael Popkin, managing director and co- head of ILS at JLTCM, said: “We have worked closely with our strategic service partners to build a scalable vehicle that will open up a wide range of possibilities for our clients.


“With the growth of alternative capital and


the rise of the reinsurance manager, we wanted to find innovative ways to bring cedants and investors together.” Popkin said the transaction would be the first of many for Market Re.


Rick Miller, managing director and co-head


of ILS at JLTCM, added: “We remain focused on the democratisation of the capital markets so that issuance doesn’t remain the domain of larger cedants.


INTELLIGENT ILS JUNE 2014


JHLT’s vehicle will encourage smaller issuers of cat bonds


“We are delighted that we have been able to


create a more cost-effective vehicle that will enable cedants to source capital markets capacity for even smaller deals.”


The launch of this platform was just the latest


recent development for JLTCM in this area. In March, JLT Towers Re Bermuda was formed through the merger of JLT Re, Bermuda and Towers Watson Re, Bermuda. The firm said at the time that the expanded operations will aim to build closer relationships with Bermuda’s reinsurance carriers as well as the ILS funds and third-party reinsurance capital firms based on the island.


This focus on the ILS and alternative risk


transfer markets has been backed up by some important hires in recent months.


David Flandro, a well-known figure in the


alternative reinsurance space, joined the broker as global head of strategic advisory from Guy Carpenter where he headed up corporate strategy, international rating advisory, market entry, capital structure, credit risk advisory and other issues.


Ed Hochberg, executive vice president, global head of analytics, banking, and advisory at JLT Towers Re, said: “This new and important role at JLT Towers Re will focus on our new business strategy, ERM and strategic/financial consulting. David’s proven track record and personal drive make him an excellent fit for JLT Towers Re and we are very excited (continued overleaf)


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