Insurance broker Marsh said it has created a reinsurance sidecar facility to provide capacity to its clients for property-catastrophe risks.
The New York-based insurance broker, a subsidiary of Marsh & McLennan Companies, said the new entity, MaRI (Marsh Risk Innovations) will provide reinsurance to Bermuda-based insurer ACE, creating $400 million in extra capacity to its clients for the next three months.
Depending on demand, market conditions and “other factors,” Marsh said the program could deliver more than $1 billion in total extra capacity over the next year.
Marsh said this program is unique in that it is providing capacity to clients using the capital markets through ACE.
The program was put together with the collaboration of Marsh, ACE and Morgan Stanley, which served as structuring advisor and placement agent to create the new facility.
“In the wake of the 2005 U.S. hurricane season and growing concerns about natural disasters in the years ahead, obtaining sufficient insurance coverage for catastrophic loss has been extraordinarily difficult for many of our clients,” said Brian Storms, chairman and chief executive officer of Marsh.
“The capacity MaRI provides could only be produced by a firm with deep intellectual capital, an integrated approach and excellent industry relationships–as evidenced by our important collaboration with a highly-rated carrier like ACE.”
“In addition to the direct access it provides investors to the catastrophe risk component of large U.S. commercial property policies, MaRI includes several other important innovations over previous sidecar structures,” said Ken Pierce, an executive director in Morgan Stanley's Insurance Products Group responsible for sidecars and the MaRI transaction.
Investors in MaRI include affiliates of Lehman Brothers, Marsh & McLennan Risk Capital Holdings, and several funds with expertise in insurance and risk-linked securities.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
