Howden Capital Markets launches to bring investment capital to clients

Howden Capital Markets has been launched as a new, nimble capital solutions advisory unit under HX, the data and analytics division of insurance and reinsurance broking, underwriting and advisory group Howden Group Holdings.

Howden Capital Markets will assist Howden clients in accessing all forms of capital to complement traditional insurance and reinsurance capacity.

Sitting under HX (previously Hyperion X), Howden Capital Markets will offer a capital agnostic approach to advising and arranging insurance and reinsurance client access to investment capital for multiple uses within their businesses.

Howden Capital Markets (HCM) has an ambition to “develop innovative products to service clients, markets and investors,” the company said today.

It cited the increasing confluence of insurance and capital markets as providing it an advisory, structuring, and arrangement service opportunity, as part of Howden’s broader client offering.

The new capital markets unit will offer a range of services, including advisory for mergers and acquisitions, capital raising, restructuring, risk securitisation, yield enhancement solutions and more for insurance, reinsurance and risk management clients.

Which suggests Howden Capital Markets will put itself into the insurance-linked securities (ILS) arena, targeting delivering securitisation transactions for insurance and reinsurance clients to enable them to access sources of ILS and institutional capital to complement reinsurance and retrocession programs.

David Flandro, Head of HX Analytics stated, “There is an emerging demand in insurance for a nimbler, alternative adviser who is internationally-focussed, with insights underpinned by technology and analytics. With HX’s data-driven IP, HCM will deliver the most impactful solutions available including a full range of risk and capital advisory services for investors and clients. HCM’s purpose is to identify new opportunities and enhance firm value for all stakeholders.”

In addition, Howden Group has identified an opportunity to create what it sees as long-term, sustainable value in the burgeoning environmental, social, and governance (ESG) arena, with this capital markets unit offering it a position to play a role in developing solutions to tomorrow’s risks.

Mark Shumway, Executive Director and Head of Advisory, HX, commented, “Product innovation is key in delivering solutions not only for our clients but also for the wider world, as we look to build a more sustainable future. A capital markets advisory capability enables us to do more in this space, such as developing risk management solutions for humanitarian aid and sustainable energy projects.”

Howden already brokers collateralised reinsurance and retrocession with ILS funds and capital market players for its clients, helping them to access the institutional backed capacity.

The addition of a dedicated Capital Markets unit will enable it to provide a broader range of solutions to connect clients with the capacity of alternative and ILS markets.

Alongside traditional insurance capacity, access to the capital markets can result in lower risk transfer costs and superior outcomes, the company believes.

Elliot Richardson, Chairman, Howden Reinsurance Brokers, said, “The market is currently the most dislocated it has been in a generation, with rate hardening gathering pace against the backdrop of a global pandemic and industry consolidation. We see this as a real opportunity to create solutions for investors, be they insurers, MGAs or insureds, through HCM using our data-led approach via HX.”