With the completion of its acquisition of the treaty reinsurance business of Willis Towers Watson, Arthur J. Gallagher and its reinsurance unit Gallagher Re has an opportunity to accelerate sales of insurance-linked securities (ILS), its senior executives told Artemis.
Speaking in an interview with Artemis just after the acquisition of Willis Re was announced, new Global CEO of Gallagher Re James Kent and AJG CEO Pat Gallagher, explained that the insurance-linked securities (ILS) business offering of Willis Re Securities is a key area of opportunity.
As we’ve explained before, Gallagher already has specific ILS, catastrophe bond and collateralized reinsurance expertise in its broking teams and its insurance management unit Artex, which of course owns ILS leading facilitator Horseshoe.
That means the AJG group has already been quite active in ILS, but now with the assumption of the Willis Re Securities team and its expertise in structuring and selling ILS and catastrophe bond securities, as well as capital raising, the company now has a holistic ILS market offering.
“We were a big ILS player before this, not in the security side, but the two marry up very, very nicely,” AJG CEO Pat Gallagher told us.
Gallagher Re’s new Global CEO, James Kent, expanded on this, “Like every business within the legacy Willis Re business, we’re very proud of the offering and the team that exists, and the ILS team is absolutely part of that. I think the key, and it really comes back to integration, is how do we best integrate that within the entirety of the Gallagher organization, and specifically Gallagher Re, to best serve our clients and make it most effective for our clients, in terms of new sales.
“So, Gallagher had some investments in businesses that have an ILS association. But the point about the Willis Re team, it will be firmly embedded within the combined reinsurance businesses and I think there’s a real opportunity for us to accelerate sales.
“Like everywhere else, we will be seeking to make investments in that business in talent to support what we have today and accelerate forward for tomorrow.”
Gallagher Re now has an exciting opportunity to evolve its reinsurance broking and ILS management offerings, to now incorporate the ability to structure and sell securities issuances.
If that can be developed into a fully-integrated offering, it will benefit the group and provide synergistic opportunities to bring ILS capital more closely to its reinsurance clients, as well as embed ILS risk transfer within its broader insurance and reinsurance market product-set.