Tokio, GC Securities launch new private cat bond platform
A Tokio Millennium Re (TMR) subsidiary and GC Securities have teamed up to create and launch a new private catastrophe bond platform.
They say the Tokio Tensai Platform will bring catastrophe bond sponsors a more efficient solution for funding excess of loss catastrophe reinsurance in the capital markets.
Tokio Solution Management is a leader in the risk transformation business, and GC Securities, an arm of Guy Carpenter and division of US broker/dealer MMC Securities Corp, is a leader in the catastrophe bond market, have collaborated
“Tokio Solution is thrilled to introduce the Tokio Tensai Platform as an alternative to the traditional Rule 144A offering process,” Kathleen Faries, CEO of Tokio Solution said, “We are committed to using our experience and strength within the Tokio Millennium Re Group to bring innovative products and services across the full spectrum of the convergence market.”
Tokio Solution will provide clients the ability to sponsor catastrophe bond transactions through Shima Reinsurance, the Bermuda domiciled Class III Segregated Accounts Company of TMR. GC Securities will serve as a placement agent for each of the private placements through Shima Re.
Through a simplified and standardised process, the Tokio Tensai Platform is designed to significantly reduce the time and cost traditionally associated with sponsoring catastrophe bonds by utilising Shima Re’s platform and proprietary shelf documentation, the companies said.
“The Tokio Tensai Platform will also allow clients to customise coverage along a range of triggers and reinsurance structures while in keeping with the lower cost approach of the product,” a statement said.
Chi Hum, managing director at GC Securities, commented: “This joint effort between GC Securities and Tokio Solution provides capital markets access to an underserved segment of (re) insurance buyers whose capacity needs are below the threshold amount needed to justify a traditional Rule 144A catastrophe bond issuance. The advantages of capital markets capacity previously available only to the largest of capacity buyers will now be made available to a broader client segment.”
The name Tokio Tensai is derived from the Japanese word “Tensai,” which in English means “Genius” and “Act of God” — an appropriate reference for a product that is innovative and covers catastrophe risks, th companies noted.
The English translation of Shima is “Island.”
Guy Carpenter is a wholly owned subsidiary of Marsh & McLennan Companies.