Samir Shah, a Senior Vice President at major global primary insurance group AIG, has moved to a new role as Head of Capital Markets for the insurer, perhaps signaling an increased focus at AIG on leveraging the capital markets for reinsurance.
Shah was previously SVP and Head of Reinsurance Buying, from 2011 to 2014, before which he was Chief Risk Officer. Under Shah’s watch AIG has tapped the capital markets for reinsurance protection by sponsoring catastrophe bonds seven times, with the most recent being the $500m Tradewynd Re Ltd. (Series 2014-1).
Shah’s role changed to SVP and Head of Capital Markets in late 2014, his Linkedin profile shows. He will retain oversight for reinsurance buying for AIG, according to the Insider, but the change in role title could signal an even greater focus on the capital markets, insurance-linked securities (ILS) and collateralized capacity at the insurer.
In total AIG has sponsored seven catastrophe bonds since 2010, which was the year when Shah joined the firm. The seven cat bonds amount to a total of $2.875 billion of reinsurance risk transfer capacity secured from capital markets investors.
AIG has also been discussed in other media as one of the major primary insurers that could look to establish its own reinsurance vehicle that shares its risk with capital market investors. This captive type sidecar approach is something that has been mooted for a few months as a possible development for large primary insurers looking to leverage lower-cost ILS and capital markets capacity in a bigger way.
It makes perfect sense to raise the profile of capital market risk transfer activities at a major insurer like AIG. With the ILS market growing, interest from institutional investors in participating in reinsurance programs at a high and the options to leverage ILS capital growing all the time, AIG is likely to make increasing use of collateralized and ILS capacity.
AIG’s seven catastrophe bond deals sponsored under Shah’s watch: $425m with Lodestone Re Ltd. (Series 2010-1), $450m with Lodestone Re Ltd. (Series 2010-2), $575m with Compass Re Ltd. (Series 2011-1), $400m with Compass Re Ltd. (Series 2012-1), $125m with Tradewynd Re Ltd. (Series 2013-1), $400m with Tradewynd Re Ltd. (Series 2013-2) and $500m with Tradewynd Re Ltd. (Series 2014-1).
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