GC Securities and Marsh launch collateralized reinsurance platform Cerulean Re

11-09-2017

GC Securities, a division of MMC Securities, has established a private syndicated collateralized reinsurance platform Cerulean Re.

A Bermuda registered segregated account company (SAC) and licensed special purpose insurer, Cerulean is a joint venture between Marsh & McLennan Companies (MMC) business units GC Securities and Marsh Captive Solutions. It will provide an efficient and cost-effective placement process for collateralized reinsurance and private catastrophe bond deals.

The solution will help insurers access the necessary capital to enter new markets while initiating relationships with capital markets investors. By standardizing many aspects of the placement process and documentation, the platform will generate significant operational and expense efficiencies while providing cedents with bespoke, fully-collateralized products.

Cory Anger, global head of ILS origination and structuring for GC Securities, said: "Insurers, reinsurers, corporations and governments accessing long-term capital markets-based protection can now receive unparalleled support and expertise that brings the right capital to their risks.

"This collaboration offers an expansion of collateralized reinsurance opportunities, matching a more diverse range of capital sources seeking non-correlating investments to the unique risk profile of clients, thereby creating more efficient solutions."

According to the company, by investing the collateral supporting risk in appropriate assets, Cerulean eliminates credit risk while maintaining compliance with credit-for-reinsurance requirements. A documented post-event collateral retention mechanism ensures a transparent and efficient claims development and collateral release process, while a single-firm execution process with the ability to bundle investor participation streamlines documentation.

David Priebe, vice chairman of Guy Carpenter, commented: "ILS is an established part of the reinsurance and capital markets, and its participation is not wholly dependent on the (re)insurance cycle. It is here to stay.

"Cerulean leverages this capacity to support uninsured and underinsured risks, including emerging risks such as cyber and the ‘Internet of Things’, and we are excited about its ability to help our clients bring opportunity to risk to grow profitably."

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