Amlin plc, one of Lloyd’s largest insurers, has announced its intention to form a new Investment Management Partnership with John Wells, who will become Chairman, and Luca Albertini, who will become Chief Executive.
The new venture, which is subject to FSA authorization, “will manage funds focused in traded insurance risk,” said Amlin’s announcement. “It is intended that the company will launch its first fund in 2008.” It is the first such venture “to be backed by a Lloyd’s insurer, whose considerable underwriting expertise significantly strengthens the fund offering,” Amlin said. It also indicated that it would be an investor in the fund.
“For insurers, the capital markets have provided new sources of capital and new instruments at a time when capital and risk management have become increasingly important,” Amlin explained. “For investors, insurance related assets have provided a new asset class with a very good risk return profile but with very low correlation to traditional equity, fixed income and real estate asset classes, as has been very clearly demonstrated during the last year.
“The Insurance Linked Securities (ILS) market has grown exponentially in the last few years and is an established sector within the capital markets and with more insurers and reinsurers actively participating in it as protection buyers or protection sellers.”
Both Wells and Albertini are highly experienced in packaging and marketing these types of investment vehicles. Amlin noted that Wells spent almost 20 years as an investment banker with the NatWest Group in London and Tokyo. In 2000, he was one of the four founding members of Swiss Re Financial Products where he led the development of Swiss Re’s platform for traded insurance risk.
Albertini has extensive experience in both banking and insurance having spent time at the securitization units of Citicorp, GE Capital (including an assignment within GE’s European reinsurance business) and Credit Suisse First Boston. From 2003 he headed the European Insurance Linked Securities team of Swiss Re Capital Markets, where he was responsible for developing one of the largest and most successful ILS teams in Europe.
Amlin’s Chief Executive Charles Philipps commented: “Amlin intends to be an active participant in the Insurance Linked Securities market, both to enhance our capital and risk management capabilities and to generate returns from the growth and high margins available in this business. The combination of Amlin’s proven reinsurance expertise with John and Luca’s wealth of relevant capital markets experience makes the new company a strong proposition in a developing market.”
Wells noted that “Amlin is a highly respected specialist reinsurer with a clear strategy to diversify into the traded markets. Through this joint venture, we will benefit from industry-leading intellectual capital, underwriting rigor and outstanding risk origination capability which I believe will provide a superior risk profile to that normally available to arms length investors.”
Albertini described the venture as part of a “growing industry, where there is a “need for specialized investors which have both a solid understanding of the ILS and capital markets as well as a proven underwriting record.”
Source: Amlin Plc – www.amlin.com
Topics Excess Surplus Europe Reinsurance Lloyd's
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