Alternative capital a growth opportunity for Tokio Millennium Re: Kathleen Faries

The Head of the Bermuda branch of Tokio Millennium Re AG (TMR), Kathleen Faries, has said the firm sees its important strategic partnerships with alternative, or third-party reinsurance capital as a growth opportunity.

Artemis recently spoke with Faries to discuss re/insurance and insurance-linked securities (ILS) market conditions and opportunities ahead of the 62nd meeting of the reinsurance industry in Monte-Carlo in September, 2018.

While discussing growth, she explained that the reinsurer views its “strategic partnerships with third-party capital as a growth opportunity,” noting that “alternative capital is permanent.

“It has become an established and significant part of the market and can be credited for the expansion of global reinsurance capacity in 2017.”

The impressive response of the ILS community to 2017 events underlined the commitment of the capital markets to insurance and reinsurance-linked business. The fact investors returned after experiencing losses, reloaded and actually expanded the size of the marketplace in time for the January renewals, has contributed to global reinsurance capital growth.

As reported previously by Artemis, at the end of the first-quarter alternative reinsurance capital hit a new high of $95 billion, which helped dedicated reinsurance capital remain flat, and which means third-party capital now accounts for 16% of the overall, global reinsurance market pie, with further growth expected going forward.

“Partnering with this capital has been an important part of our strategy since the early days of TMR, which has enabled us to both anticipate and successfully navigate the transformation of the market and ultimately the profit margins,” said Faries.

She continued to explain that from the beginning, the reinsurer has looked to establish mutually beneficial partnerships with asset managers that have a long-term technical approach to the marketplace.

These relationships have expanded over the years, but have always been considered as strategic partners, she explained.

“We have evolved with the market in the demand over the years. From fronting only in the early days to now delivering a one stop shop that includes insurance management services (through Tokio Solutions Management), sourcing and packaging of risk, and most recently developing and delivering an efficient cloud based trading platform to be utilised by our partners,” said Faries.