Munich Re Capital Partners launched to take on ILS, retro & risk trading

by Artemis on August 14, 2015

The world’s largest reinsurance firm Munich Re has reorganised its risk trading, insurance-linked securities (ILS), catastrophe bond and retrocession activities under a new unit named Munich Re Capital Partners, that launched on the 1st July.

Munich Re has decided to launch the unit due to an “ever-increasing demand for capital optimisation, and other complex solutions for clients”, the reinsurance firm said. All of this expertise is being bundled within Munich Re Capital Partners, including what was the Risk Trading unit where much of the ILS and catastrophe bond activity occurred.

Capital Partners will sit within the Special and Financial Risks Division at Munich Re, the firm said, with a remit to actively generate new business opportunities for the reinsurer, as well as to service existing clients with both risk transfer, capital markets solutions and capital relief products.

The Capital Partners unit is headed up by August Pröbstl, who used to head up the reinsurance firms Corporate Insurance Partner unit. Rupert Flatscher, the ex-head of Munich Re’s Risk Trading unit is now leading the reinsurance firms agricultural unit.

Andreas Müller, from the Risk Trading unit, will lead the Munich Re Capital Partners origination activities, reporting directly to Pröbstl.

Müller’s team will originate alternative risk transfer business, such as catastrophe bonds, ILS, derivatives and swaps, as well as managing Munich Re’s ILS investment portfolio and ILS investor relationships. The origination role will expand beyond simply ART and ILS to also cover capital relief transactions now.

Retrocessional reinsurance will also be dealt with within the Capital Partners unit at the reinsurer, with Hans Thoenes leading that area of responsibility.

Munich Re is bringing together these activities within a single unit to ensure it can offer a broad and all-encompassing service to clients, put the right amount of focus into origination of this business and offer the full range of products from one unit, both for comprehensive as well as tailored or individual solutions.

Even the largest reinsurance firms need to take the capital markets seriously and Munich Re has always done so, with many product offerings and services to clients, as well as leveraging the capital markets for its own retrocession. The Capital Partners unit will help the reinsurer to focus these efforts, as the reinsurance market continues to evolve to a more capital agnostic risk transfer model.

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