Adding the capital markets and insurance-linked securities (ILS) expertise acquired with TigerRisk Partners into the Howden Group business represents a “massive opportunity”, according to Founder and Chief Executive of Howden Group, David Howden.
It was announced yesterday that international insurance group Howden Group Holdings will acquire reinsurance and risk capital advisory TigerRisk Partners.
The transaction will position Howden as a global re/insurance intermediary with $30 billion of premiums placed through its business activities.
As we explained, this acquisition will include the TigerRisk Capital Markets & Advisory business, which has a growing footprint in insurance-linked securities (ILS) markets and catastrophe bonds, as well as a core involvement in capital raising and other investment banking type arrangements.
As we said, TigerRisk is one of the (if not the) fastest climbers in our catastrophe bond bank and brokers leaderboard, which is all incremental business for Howden and a new market segment that the Group has not previously been heavily involved in.
Speaking in an interview today, CEO David Howden explained that he sees the acquisition as “catapulting” the Howden business into a leading position in a number of reinsurance fields.
Howden said that TigerRisk had been built into a leading reinsurance, capital markets and analytics business, which when combined with the Howden business “catapults us to be quite frank, into a leading position in a number of reinsurance fields as well.”
Referring to the platform TigerRisk Partners founding team has created, Howden said, “No one else has built a really significant capital markets business inside an insurance business.”
Adding, “I think, in today’s world where we’ve got a lot of challenges facing our clients, a lot of need for new capital coming in and you’ve probably got the hardest reinsurance market we’ve seen in decades.
“I think having a proper capital markets business intrinsically linked into a reinsurance and insurance business, I think that’s a very interesting story.”
Howden did already have its own recently launched Capital Markets unit, so the market segment is not unknown to the company.
But TigerRisk’s capital markets and investment banking business is far more mature and active in the global marketplace, significantly expanding the Group’s activities in ILS and other capital markets business.
The acquisition is certainly not about cost savings, Howden said, adding, “This is about how we grow our businesses faster together. It’s first and foremost, all going into one, creating this new reinsurance, capital market advisory business and really pulling on our existing expertise, to deliver much more to our existing client base. That’s first and foremost.”
Discussing the integration of capital markets expertise from TigerRisk into Howden, the CEO believes this is a significant opportunity.
“There isn’t really, a really proper capital markets business linked to an insurance broker business, where you’ve got data analytics, where you’ve got analysis, where you’ve got actuaries. Where you’ve got all of those things linking with a proper capital market.
“As I’ve touched upon before, I think that’s going to give us a real opportunity in a world that is desperately needing new capital to come in.”
Citing current problem segments of the global insurance and reinsurance market where capacity is required, Howden said that examples like the challenged Florida renewal market, the global cyber insurance space and macro issues such as supply-chains are all going to require innovation and capital.
“We really need new capital. We really need to have solutions for our clients, and, I think, having a capital markets business sitting inside our Group, is really a massive opportunity,” he explained.