New Tokio Millennium Re CEO hints at focus on ILS & convergence

Bermuda-based reinsurer Tokio Millennium Re AG, a subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd., affirmed its commitment to, perhaps hinting at an increased focus on, the ILS and reinsurance convergence markets in a recent announcement.

The press release was issued to announce the appointment of new CEO Stephan Ruoff who, subject to regulatory approval, will take on the role of CEO in April 2015 at the same time as current CEO Tatsuhiko Hoshina, who has been with the firm since its launch in 2000, moves over to the Board as Vice Chairman.

Ruoff, currently Deputy Chief Executive Officer, Chief Underwriting Officer and Head of Europe at Tokio Millennium Re, will take on overall leadership responsibilities for TMR as well as continuing his role as Head of Europe.

Tokio Millennium Re is an ambitious reinsurance arm which has built a strong franchise in a relatively short time and the new CEO said that further expansion is ahead for the firm.

“I look forward to assuming the CEO position. The solid foundation built by Mr. Hoshina has created a strong platform and an exceptional brand for TMR AG to expand upon in the coming years. Moving forward with a clear strategic plan in place, our goals are continued diversification and building stronger relationships with our client base,” Ruoff explained.

Of course Tokio Millennium Re already has an established unit, Tokio Solution Management, which focuses on the convergence space, with services for issuers and sponsors of catastrophe bonds and private insurance-linked securities (ILS) or collateralized reinsurance transactions.

With the increasing focus on alternative capital in the reinsurance space, as well as the continued interest from ILS investors and sponsors in leveraging collateralized structures, the Tokio Solution Management arm looks set to become a growing focus of the firm.

Ruoff commented; “We will also further leverage our outstanding knowledge and reputation in the convergence space of traditional reinsurance and capital markets through the products offered by our subsidiary, Tokio Solution Management Ltd.”

It would not be surprising to see an increased focus on the convergence space from Tokio Millennium Re and perhaps the Tokio Marine Group as a whole. With market leading franchise value and a client focused approach the group could benefit greatly from an increased focus on convergence capital and ILS.

Ruoff said; “Excellence in our operational platform in terms of capital deployment, talent development and group alignment will enable us to achieve these goals.”

What will be intriguing to watch is whether Tokio Millennium Re would ever put third-party capital to work alongside its own balance-sheet capital. With the kind of backing it has from the parent group perhaps it doesn’t need to, but to create a compelling, capital-source agnostic client offering to complement its strong balance sheet may be a very interesting move for the firm.