Resolution Life, the life insurance focused arm of insurance entrepreneur Clive Cowdery’s Resolution Group, has announced the promotion and appointment of Steve Hales as CEO of its Bermuda reinsurance unit Resolution Re.
Resolution has an interesting strategy that sees it taking on large books of life insurance business, using fund type capital structures backed by institutional investors to which it channels returns and profits in the form of dividends.
The company has established a number of permanent capital structures over the years, focusing on acquiring and managing in-force portfolios of life insurance to the benefit of the vehicles institutional investor backers.
In this way, Resolution Life effectively reinsures the books of life business in order to acquire the premium assets and manage them through to the policies conclusion, leveraging the appetite of institutional investors in the process.
Resolution Re is the group’s Bermuda domiciled reinsurance vehicle. It supports the Resolution Life Group in transactional work, most recently having completed a $5.7 billion deal with Symetra Life Insurance Company in September 2018.
Hales has been with Resolution Life Group since 2017, working as its Executive Director of Europe.
Prior to that he worked as the Head of Connected Insurance at Assicurazioni Generali, leading Data Science and ‘Internet of Things’ capabilities across the insurance group. He joined Assicurazioni Generali in 2013 to lead its Global Life business line, prior to which he worked as Head of AXA’s Life and Savings business across its Southern Europe, Latin America and MENA markets.
Sir Clive Cowdery, Executive Chairman at Resolution Life, commented on the news, “Steve is well placed to build our reinsurance business given his previous experience in global life markets and his contribution to the launch of Resolution Life Group.”
Steve Hales, CEO of Resolution Re, added, “I am excited to begin my role heading up Resolution Re. The life insurance industry is going through a deep transformation in a difficult macroeconomic environment. By providing a safe harbour for the sector’s existing policyholders, I believe that Resolution Re can genuinely help insurers through these challenging times. The next couple of years promise to be a lot of fun as we expand Resolution Re across different markets across the world.”
Cowdery has also looked to launch a closed-life fund backed by institutional capital, it was reported in 2017, as Resolution looked to expand out the access to life insurance linked returns it was delivering to its investors.
Extracting profitable value from large portfolios of life insurance risk is attractive to institutional investors, as well as to the large global reinsurance groups.
It take significant expertise to manage these businesses, while achieving certain economies of scale is also vital if the life insurance books and businesses are to run profitably and deliver the returns anticipated.
This business underscores how attractive insurance-linked returns are though, as many of the larger institutional ILS fund investors would also back these kinds of open and closed life book vehicles. It’s also another example of institutional money from the capital markets being used as reinsurance capital to underwrite deals, delivered through a fund-like structure.