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The Guys and Gal at Carpenter: An Eclectic, Talented Mix of ARTists

"It's the people, as with anything," observed John Nichols, president of Bermuda-based Renaissance Re, of Guy Carpenter's GC Securities Capital Markets Team, a division of MMC Securities Corp. "They have good leadership which has allowed them to put together a good team."

Added Mark van Zanden, outwards reinsurance business group leader at Bermuda-based Catlin Group Ltd.: "They have an excellent combination in Chi Hum in capital markets and Cory Anger as a great project manager. We did a cap bond issue with them in January of this year and because of the nature of the market at the time, they needed to be on top of things minute by minute, and they were, often making successful decisions on the fly."

Taking advantage of opportunities in the marketplace, the group created a dedicated Risk Swap Desk in 2008. The desk placed nearly $1 billion in risk swap limit last year, which accounted for 40 percent of all risk swap limits placed in the market.

In 2009, the group acted as a placement agent for the creation of a new Bermuda reinsurance company, Timicuan Reinsurance II Ltd (Tim Re II) sponsored by Renaissance Re Holdings Ltd. The June 2009 announcement of the formation and funding of Tim Re II hailed the creation of additional capacity for the Florida homeowners market for the upcoming renewal season.

At the end of 2008, GC Securities further expanded its broker-dealer capacity to underwrite bonds and perform secondary trading.

This year Trading Risk magazine cited the group as the recipient of a trading risk award for the nonlife deal of the year, the Blue Coast Ltd. catastrophe bond. In this deal, the capital markets team acted as co-lead manager, joint book runner and joint structuring agent on Blue Coast Ltd, a catastrophe bond program benefiting Allianz Risk Transfer Bermuda Ltd.

The bond provides Allianz Risk Transfer with $120 million of fully collateralized, multiyear aggregate protection against the cumulative effect of hurricane risks in coastal states from North Carolina to Texas through Dec. 1, 2010.

The three-tranche note issuance, completed in July of 2008, was the first-ever catastrophe bond transaction to provide multiyear aggregate protection against U.S. hurricanes. Despite being marketed in an active wind season in the Atlantic, investors responded enthusiastically, with the first issuance oversubscribed on the Class A and Class B notes.

Managing Director
Guy Carpenter & Co.
New York

Managing Director
Guy Carpenter & Co.
New York

Managing Director
Guy Carpenter & Co.
New York

Working the Breadth and Depth Angle

The GC Securities corp. finance and mergers and acquisitions team provides great depth and width of knowledge for its clients. "They take the time to understand your needs," said Locke Burt, CEO of Security First Insurance Co. in Ormond Beach, Fla. "Their breadth of market contacts is among the best in the insurance space. They have a tremendous list of clients."

In the past 18 months, the GC Securities team has utilized its knowledge in a number of advisory engagements to help clients execute mergers and acquisitions, including sell-side and buy-side mandates, maximizing value and minimizing the cost of capital.

On the corporate finance advisory and sell-side, the firm proved of value to a personal lines insurer during its acquisition by one of the world's leading global property and casualty reinsurers. Prior to the transaction, GC Securities provided corporate finance advisory services by drawing on its market knowledge and industry contacts to identify potential buyers. From that point, the firm assisted in all discussions and negotiations and guided the deal through the acquisition process.

In addition, the firm was tapped to work on a project for a long-time Guy Carpenter client that provided risk management services for public and private sector entities. When the client decided to form its own insurance company, GC conducted financial modeling, raised capital and performed ratings analysis. The new company received an A rating from A.M. Best (secured by Guy Carpenter's Ratings Advisory Group) and officially launched in late 2008.

The GC team worked as the exclusive adviser on a buy-side transaction, which included structuring additional equity, debt and equity-linked securities, to enhance the capital based of one of the largest independent writers of homeowners business in Florida.

GC Securities helped this client in acquiring a book of business owned by a distressed competitor. , and it is currently working to refinance outstanding debt to lower interest payments and recast the amortization schedule.

Managing Director
Guy Carpenter & Co.
London

Managing Director
Guy Carpenter & Co.
New York

Vice President
Guy Carpenter & Co.
London

Guys With Quiet Firepower

In the last year, the Guy Carpenter industry loss warranty (ILW) team has been involved in the development, shaping and arrangement of more that 150 ILW contracts. This involved a variety of franchises, territories and perils, structured in a number of ways, offering short-period, risk, LiveCat, multiterritory, multiyear and second and third-event coverages.

Guy Carpenter employs this dedicated unit to trade a product that now sits firmly in the mainstream of the tools designed to provide reinsurance coverage solutions. To this end, the team continues to demonstrate the value of ILWs, trading more than $1.5 billion of aggregate limits over the last year, to a broadening base of clients and markets. This is all built on a reputation for a discreet and prompt execution. "We like to operate quietly, and the Guy Carpenter ILW team handles things that way for us," said a top executive of a Bermuda-based company.

"They have been in the market for a long time," noted Greg Hagood, a principal at Bermuda-based Nephilia Capital Ltd. "They have a huge footprint in the market. They have more of a mainstream product."

Added Hagood: "They are very professional and ethical. When dealing with them, you know there's a legitimate opportunity at the other end of the call."

"We buy eighty percent of our ILW protection from them," observed Mark van Zanden, outwards reinsurance business group leader at Bermuda-based Catlin Group Ltd. "Their speed of execution is outstanding. We ask for something on Monday afternoon and 24 hours later the transaction is done. They also have excellent views on pricing based on an exceptional knowledge of the market. They don't take a shotgun approach in the market. This is all helped by them being the biggest in the market."

Managing Director
Guy Carpenter & Co.
Minneapolis

Managing Director
Guy Carpenter & Co.
Minneapolis

Assistant Vice President
Guy Carpenter & Co.
Minneapolis

Senior Vice President
Guy Carpenter & Co.
Minneapolis

Intuition Guides Team at Guy Carpenter

Sophisticated as Guy Carpenter's i-aXs Web-based platform in sales and product deployment is, one can easily feel comfortable using it, said Chris Sukow, director, ceded reinsurance, at San Antonio, Texas-based Argonaut Group. "i-aXs is intuitive to use.

"The i-aXs team does two things very well," added Sukow. "They listen carefully to their clients and they are proactive. They often come to us and ask how can they help us at that point in time.

"Also," noted Sukow, "though I often work with Andrew Short, I can call on 30 different people within Carpenter."

The i-aXs team regularly works with Guy Carpenter's top ten revenue-generating clients, as well as multiple other clients to customize the i-aXs platform in order to help them with exposure, portfolio and accumulation management and desktop underwriting.

This year i-aXs deployed solutions to enhance speed and overall performance, allowing clients to depend on an immediate response for critical risk management needs. This next-level performance standard is highlighted through the group's deployment through a comprehensive set of streaming real-time peril information, enabling clients to manage catastrophic events more quickly and assess their loss within hours.

The team also has continued to refine its set of portfolio management tools. One highlight of the team's development in this area is the implementation of reinsurance cost allocation, allowing clients to allocate reinsurance costs to the account level within minutes in the platform--a process that otherwise would take several days to complete if done on a manual basis. This implementation addresses a crucial timing need as companies' view of capital deployment inclusive of reinsurance cost analysis becomes more critical.

i-aXs is the only tool in the industry with a complete and interactive training and knowledge base program. This year the team introduced the online i-aXs Classroom, allowing clients to access up-to-date training materials, in-depth methodology and definitions of the analytics contained in the system.

The team was the first to deliver a full-scale Web platform with integrated reporting and mapping to workers' compensation as well as accident and health lines.