Take-up rate of Nephila backed facility Alternus, “fantastic” – Doyle, Marsh

by Artemis on June 16, 2017

Recently launched commercial property insurance facility Alternus, which is backed by Nephila Capital, underwritten by the Schinnerer Group and brokered by Marsh, already boasts a “fantastic” take-up rate, according to John Doyle, President, Marsh.

Artemis previously discussed the launch of Alternus, described at the time as “the first dedicated commercial insurance solution for retail clients backed by alternative capital.”

Capacity for the facility is being provided using Allianz Global Corporate & Specialty (AGCS) paper and capacity from Nephila Capital, the world’s largest catastrophe and weather focused reinsurance linked investment manager.

The product will be offered to U.S. firms looking to insure risks tied to their international property portfolios and is able to protect up to 10% of an entire property insurance program, with limits per program of up to $200 million available.

The Chief Executive Officer (CEO) and President of Marsh & McLennan, Daniel S. Glaser, recently commented on the launch of Alternus, and now, speaking at the Marsh & McLennan Companies Young Professionals’ Global Forum 2017, Marsh President Doyle discussed the new facility.

Addressing capacity issues in the sector Doyle alluded to the $1 trillion earmarked by the pension fund sector for the property cat reinsurance space, of which roughly $74 billion has been deployed.

“What are the possibilities for the rest of that USD1 trillion? And should we just be limiting our thinking to property cat? As we build new models and understand risk better than we have before, what are the possibilities for these investors to get closer to the risk?

“We developed the first ever retail insurance facility using alternative capital,” explained Doyle, stressing that just 60 days since its launch “the take-up rate has been fantastic.”

The establishment of Alternus enables commercial insurance buyers to benefit from the efficiency of the capital markets, and with take-up rates already being hailed as “fantastic,” it seems the appetite for such a facility is strong within the industry.

But perhaps this isn’t too surprising as the product looks to bring increased efficiency to layers of risk perhaps over-priced previously, something noted previously by Chairman of the Risk & Insurance Services Segment and CEO of Marsh, Peter Zaffino.

Concerning the broader alternative capital, or insurance-linked securities (ILS) space, Doyle said that the influx of third-party capital is the main driver of convergence of traditional brokers and insurers.

“We’ll see traditional insurers and intermediaries looking to use alternative capital to take out steps in the value chain,” he said.

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