Initially, it was sole preserve of the reinsurance intermediaries but now the large retail brokers are developing capital markets arms to cater for the growing appetite of ILS investors to have access to primary insurance risk.
And earlier this week it was the turn of US-headquartered retailer Lockton to create a capital markets platform in partnership with New York private equity firm Antarctica Capital.
Lockton Capital Markets is headed by Vishal Jhaveri, the former head of insurance and pension solutions for the Americas at Citi.
Jhaveri takes the CEO position, with the broker’s chairman of Northeast operations, Michael Calabrese also serving as chairman of the new platform.
The creation of Lockton Capital Markets adds a capability to the biggest privately held insurance broker that is already well-established at several of its larger peers.
The big three of Aon, Marsh & McLennan and Willis Towers Watson all have capital markets arms that initially were housed in or worked closely with their reinsurance intermediary businesses.
Those operations now typically straddle reinsurance and retail insurance broking operations to structure solutions and bring capital markets capacity to insurance companies and increasingly the original corporate insured.
In a statement, Lockton said the nascent New York-based operation will facilitate investment banking and capital markets transactions focused upon the convergence between insurance and alternative capital.
It noted that Jhaveri had also led alternative capital and insurance solutions teams at Houlihan Lokey, Kohlberg and JP Morgan.
The broker added that Lockton Capital Markets will focus on “niche, high impact solutions for insurers and financial sponsors”, with securities transactions executed through Gnu Securities LLC.