January 16, 2007
On January 11, Willkie client Marsh Inc. announced the creation of MaRI (Marsh Risk Innovations), a first-of-its-kind insurance facility designed to provide additional capacity to the depleted property catastrophe insurance market this year. This new facility provides Marsh clients with additional working-layer capital for their global property catastrophe exposures. The additional capacity will be made available through reinsurance provided by MaRI, Ltd., a newly-formed Bermuda-based reinsurer, to ACE, a leading Bermuda-based insurance company. In creating MaRI, Marsh collaborated with ACE and Morgan Stanley, which served as structuring advisor and placement agent.
This unique new facility offers Marsh’s large corporate clients exclusive access to insurance capacity intended to address current instability and shortfalls in property catastrophe risk coverage. This type of extra risk capital, commonly referred to as a "sidecar," allows reinsurers to offer more capacity to their clients, the retail insurers. The MaRI structure is especially innovative in that it provides Marsh clients with direct access to the capital markets through a highly-rated ACE delivery vehicle. Marsh expects the ACE / MaRI program to deliver $400 million in extra capacity to its clients during the next three months. Depending upon client demand, market conditions, and other factors, Marsh believes this approach could provide more than $1 billion in total extra capacity over the next year.
The Willkie team that advised Marsh on the creation of the MaRI facility includes partners Jeffrey Hochman, Leah Campbell and Henry Cohn and associate Sean Ewen.
