Swiss Re Insurance-Linked Fund Management

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Tokio Millennium Re to become full-service capital market & ILS facilitator


Reinsurer Tokio Millennium Re Ltd. has today signalled their intention to become more deeply involved in the collateralized reinsurance, insurance-linked securities, capital markets and insurance management space, with the announcement of the formation of two new corporations. The two new firms are Tokio Solution Management Ltd. (TSM), an insurance management company, and Shima Reinsurance Ltd. (Shima Re), a Bermuda-domiciled segregated accounts company.

Tokio Millennium Re says that the launch of these two new firms represents the next step in their ambition to become a full-service facilitator to capital market entities investing in reinsurance. With the backing of their well-established parent companies years of experience and financial stability, Tokio Solution Management and Shima Re enables the group to offer a full range of services to enable interested parties to invest and participate fully in the collateralized reinsurance space.

One of the services Tokio Millennium Re will be offering is transformer services, via the Shima Re segregated cell structure. With this platform at their disposal they can offer clients a way to transact and transform collateralized reinsurance contracts into securities for investment purposes. The Shima Re facility could also likely be leveraged to provide ‘cat bond lite’ style issuance facilities for anyone seeking a more cost-effective way to get an insurance-linked security or catastrophe bond into an investable form.

Tokio Solution Management will be able to assist clients with their transformer needs, as well as manage and transform transactions through ISDA swaps or their own private transformers. In addition TSM will be able to provide clients with assistance with fronting and leverage arrangements, and can also provide professional claims and loss reserving services.

Kathleen Faries, an EVP at Tokio Millennium Re and responsible for their ILW, ILS and cat bond activities, takes on the role of CEO at the newly formed Tokio Solutions Management. Kathleen commented; “This is a very exciting progression for TMR. No other provider is able to offer clients full-service market facilitation – every transaction consists of many different elements, and in an industry first, TSM will now collaborate with TMR and Shima Re to deliver access to all of those elements under one roof.”

Tatsuhiko Hoshina, President and CEO of TMR added; “Creating new reinsurance markets has always been a part of TMR’s original mandate. We have been supporting the expansion and growth of the collateralised reinsurance market and with the creation of TSM and Shima Re, we are entering the next phase of fulfilling that mandate and are very pleased to be able to offer our clients a broader range of services.”

This is a very interesting move by Tokio Millennium Re to broaden the services they can offer within the reinsurance and capital markets convergence arena. There are opportunities to profit in this sector, as evidenced by the likes of Kane Group and Horseshoe Group, who will be considered some of the main competitors for the Tokio Solutions Management range of services. However with the backing of a reinsurer and the group wide resources and underwriting skills at their disposal, this puts Tokio Millennium Re in an interesting and potentially market leading position in this important niche of the reinsurance market.

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