The Banking Report 2011: Give us some credit


The ability to post collateral is becoming ever more important for insurers and reinsurers. Intelligent Insurer investigates why this is the case and how banks enable this service for their clients.

In a world where the capacity to demonstrate an ability to honour financial commitments is becoming more important, tools such as letters of credit (LOCs) and trusts are becoming vital for insurers and reinsurers.

Take, for example, Tokio Millennium Re’s market solutions unit, which works with funds invested in insurance linked securities. Tokio Millennium Re fronts these funds before transferring the risk back to them using swaps or a reinsurance agreement.

“But the key to this is that we require these trades to be fully collateralised,” says Kathleen Faries, senior vice president at the unit.

Tokio Millennium Re, Wells Fargo, Deutsche Bank, Bank of New York Mellon, Hannover Re, BNP Paribas, Flagstone re, BNY Mellon, Banking, Insurance, Reinsurance

Intelligent Insurer