insurance securitization

Hudson Structured Capital Management, the insurance, reinsurance and transportation linked investment firm set up by ex-Goldman Sachs structured products leader Michael Millette, has closed on and secured its $250m anchor investment from Blackstone, Artemis has learned.

Local Chinese news media reports that a launch of the Shanghai Insurance Exchange is edging ever nearer, with a reported 91 companies having agreed to contribute a combined $343 million (2.235bn yuan) of capital to launch the exchange.

Ex-Goldman Sachs structured products head Michael Millette has lined up one of the world’s leading asset management groups as an anchor investor in the funds to be launched by his new venture Hudson Structured Capital Management.

Between 2010 and 2014 insurance-linked securities (ILS) issuance made up just 1.17% of the reported $2.87 trillion of issuance seen in the global securitisation market, highlighting room for significant growth as ILS could provide investors with a real alternative in this market.

Guy Carpenter firmly threw its hat into the insurance-linked strategies ring this week, saying that the partnership announced last week between the reinsurance broker and Vario Partners, forming a non-catastrophe risk ILS vehicle, is a key innovation and initiative for the broker.

Vario Global Capital Ltd. has been launched with a goal of becoming the “leading ILS investment vehicle and fund focused on non-catastrophe insurance linked securities” by specialist insurance analysis and modelling firm Vario Partners LLP and reinsurance broker Guy Carpenter.

Vario Partners, the specialist risk advisor launched in late 2014 by three former PwC exec’s to facilitate the bringing together of portfolios of insurance or reinsurance risk and the capital markets through securitisation or ILS means, has hired a CFO.

Ex-Goldman Sachs partner and managing director of structured products Michael Millette, a key figure in the development of the catastrophe bond and ILS market since the mid-1990’s, is returning with a new venture named Hudson Structured Capital Management.

According to reports in local Chinese news media, the Shanghai Insurance Exchange is nearing approval and the plans will include providing a platform for trading in insurance or reinsurance risks, with securitisation and catastrophes bonds an expected feature.

Two regulatory organisations in China have signed an agreement to establish a group to work on bringing the securitisation of catastrophe insurance risks to the country and to accelerate the adoption of catastrophe bonds for risk transfer needs.