Tokio Solution Management Ltd. and GC Securities, a division of MMC Securities Corp., have created a private catastrophe bond platform to meet the needs of an underserved segment of reinsurance buyers.
The platform is called the Tokio Tensai Platform and it will provide access to reinsurance buyers whose capacity needs are below the threshold amount needed to justify a traditional Rule 144A catastrophe bond issuance, GC Securities said in a statement, without specifying an amount.
In a statement announcing the platform, Chi Hum, Managing Director at GC Securities, said, “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.”
Kathleen Faries, CEO of Tokio Solution said the Tokio Tensai Platform is an alternative to the traditional Rule 144A offering process.
Building off Tokio Millenium Re’s experience as a facilitator and risk transformer, Tokio Solution will provide clients the ability to sponsor catastrophe bond transactions through Shima Reinsurance Ltd., the Bermuda domiciled Class III Segregated Accounts Company of TMR.
GC Securities, a U.S. registered broker-dealer and member FINRA/SIPC, will serve as a placement agent for each of the private placements through Shima Re.
Through a simplified and standardized process, the Tokio Tensai Platform is designed to significantly reduce the time and cost traditionally associated with sponsoring catastrophe bonds by utilizing Shima Re’s platform and proprietary shelf documentation. Still, the Tokio Tensai Platform will also allow clients to customize coverage along a range of triggers and reinsurance structures while in keeping with the lower cost approach of the product.
The name Tokio Tensai is derived from the Japanese word “Tensai,” which in English means “genius” and “act of God”— a reference to innovation and coverage of catastrophe risks.
The English translation of Shima is “Island.”
Source: GC Securities, Tokio Solution Management, Ltd.