Tokio Millennium Re launches Capital Solutions unit; increases ILS focus

by Artemis on September 13, 2015

Tokio Millennium Re, the global reinsurance operations of Tokio Marine & Nichido Fire Insurance Co., Ltd., is increasing its focus on ILS business and advancing its partnership with the capital markets, with the launch of a new unit named ‘Capital Solutions’.

The Capital Solutions unit takes the work that has been ongoing at TMR under the Tokio Solution Management Ltd. brand and aims to focus on developing new capital markets products, to better bridge the gap between capital market players and insurance or reinsurance.

The re/insurance firm aims to leverage the use of technology in order to transact business with it’s growing roster of capital markets partners, under the new unit, aiming to further support and build long-standing relationships with capital market and ILS players.

Stephan Ruoff, TMR’s Chief Executive Officer, commented; “TMR has a successful track record in working with the capital markets since 2003. The company is further expanding its capital markets strategy as a core contributor to the organisation’s earning power by strengthening its product offering and services. Doing so enables TMR to offer greater capacity to its cedants, assists in managing our net portfolio and provides more opportunities to work with our capital markets partners.”

As Ruoff implied, TMR sees this as the next step in its development into a true re/insurance to capital markets facilitator and underwriter, augmenting its own balance-sheet with the scale of the capital market, to the benefit of clients and partners.

TMR launched Tokio Solution Management in 2012, as a distribution hub and access point to the capital markets, adding a true capital market platform. It also formed its Shima Re Class 3 segregated accounts reinsurer, through which it facilitated and transformed reinsurance business to capital market investors.

In 2013 the Tokio Tensai private catastrophe bond platform was launched, in partnership with GC Securities, as the next stage in TMR’s capital markets evolution. In 2015 the Tokio Tensai platform expanded its remit, making it possible to transact private collateralised reinsurance notes.

Also this year, TMR formed Norwood Re Ltd., its own Bermuda-domiciled special purpose insurance vehicle, adding another string to its capital markets facilitator bow.

The Capital Solutions unit launch today is the next step in this evolution into working with the capital markets on ILS solutions.

TMR says that the launch will give it a “more holistic underwriting and retrocession approach, better leverage of the company’s expertise and analytics to help build portfolios that outperform the market and better alignment of resources to offer new products and services.”

Tokio Solution will remain the distribution hub of the organisation, working closely with capital markets and ILS investor partners in managing and facilitating reinsurance linked contracts, structures and transactions.

Edwin G. Jordan will head up the new Capital Solutions unit from TMR’s Bermuda offices. Jordan brings together reinsurance underwriting expertise with deep capital markets knowledge, which the firm believes will help to take TMR’s capital markets strategy to the next level. He will remain the Head of Bermuda, his current role, until 31st December 2015.

Kathleen Faries, currently the Chief Executive Officer of Tokio Solution, will succeed Jordan as Head of Bermuda for TMR on 1st January 2016, stepping down from her current role at Tokio Solution. A successor to Faries will be appointed in due course, with a transition plan underway and an announcement expected to be made at a later date.

Ruoff commented; “Having Ed focus his efforts solely on leading and ensuring the success of the Capital Solutions unit and appointing Kathleen as the Head of Bermuda for TMR further supports our commitment to the capital markets space. These management appointments underscore our view that the synergy and collaboration across TMR and Tokio Solution in executing upon our capital markets strategy will be key to our future success.”

“What we’re trying to do is take the third-party capital strategy and really start to make that core to TMR and our earning power. The Capital Solutions unit will develop new product, we’re working on a new technology platform to help us integrate with our partners, taking our strategy to the next level from the analytical, technology and innovation side.”

For Tokio Solution the changes will provide the unit with increased options to work with capital management and ILS partners. It will remain the distribution hub, facilitating contracts, managing collateral, managing portfolios of insurance and reinsurance risk and working with asset management and investor partners.

The new unit will work seamlessly with TMR and Tokio Solutions with the goal of adding more value to the overall firm and its clients, bringing to together the capital market strategy, so it can execute on its vision of bringing capital to clients in the most appropriate form and risk to the capital with the right appetite, all under the banner of a highly rated global reinsurance group.

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