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Marsh Forms New Collateral Solutions Group

IBR Staff Writer Published 08 August 2010

Marsh, an insurance broker and risk advisor, has formed a new Collateral Solutions Group (CSG) to ensure that all clients consistently receive the best possible collateral terms and most appropriate solutions to meet their individual needs.

According to the Marsh, the new group will be comprised of more than 30 senior casualty experts from around the firm who, in partnership with several banks, MMC Securities and Marsh Business Analytics, will help clients achieve the best collateral outcome.

CSG’s initiatives include maintaining senior level relationships with carriers’ credit risk personnel and actively monitoring each carrier’s collateral requirement underwriting guidelines and acceptable collateral instruments.

The initiatives also include to develop analytic models that will compare and contrast insurers’ collateral requirements based on different scenarios, including the long-term impact of switching from one carrier to another; dedicating specific resources to loss portfolio transfers and other deductible closeout strategies; and partnering with leading banks and MMC Securities to develop alternative collateral facilities.

David Karr, managing director and co-chair of the CSG, said: “Collateral requirements have become an increasing burden for our clients and prospects with loss-sensitive insurance programs as credit markets have tightened and collateral costs have increased.

This burden has been particularly notable from the point the financial crisis began almost two years ago and remains prevalent today. We don’t see any indication of these trends reversing.”

Daniel Aronson, managing director and co-chair of the CSG, said: “Against these headwinds, our clients are increasingly under pressure from their senior management to rein in collateral requirements in order to reduce costs and free up capital for other corporate purposes. With the establishment of CSG, Marsh is taking collateral solutions to the next level and providing clients, including those in financial distress, with real solutions to address their real needs.”