Marsh Captive Solutions has been appointed as insurance manager to NCM Re, the first insurance-linked vehicle (ILS) approved and launched in the UK.
In January 2018, NCM Re completed the first UK ILS transaction, worth $72 million.
The transaction, sponsored by specialist Lloyds and reinsurance company Neon Underwriting, saw NCM Re enter into a quota-share agreement with Neon’s Syndicate 2468 to underwrite a portion of its property treaty reinsurance and facultative portfolios.
The launch of the vehicle and ILS transaction followed the establishment of new ILS legislation and regulation by the UK Government in 2017.
Brendan Roche, global leader of ILS/special purpose vehicle management services at Marsh, said he expected that the establishment of the legislation and regulations on ILS in the UK would “aid the growth of the ILS market and thus, in time, provide a means to help reduce the worldwide insurance coverage gap.”
He continued: “In particular, the introduction of protected cell company legislation, as part of this new legislative process and which is only currently available to insurance special purpose vehicles in the UK, permits the growth of a collateralised reinsurance market in Europe.”
“Traditionally Europe has been used a centre for the issuance of syndicated catastrophe bonds, mainly out of Dublin, and the collateralised market will bring a more cost-effective and timely process to the transfer of insurance risk to capital markets.”
According to Roche, Marsh has a breadth of knowledge and experience in ILS as an insurance manager to similar ILS vehicles in Dublin, Cayman and Bermuda.
He explained: “Currently, Marsh manages more than 90 special purpose vehicles. Our experience in managing ILS structures extends to more than 65 transactions.”
“Our global network of offices enables us to provide comparable management services in all major, recognised, ILS domiciles and now includes the UK.”
