Investment banking and reinsurance broking firm Stonybrook Capital & Risk Management has developed a platform to support the pricing of industry loss warranty (ILW) contracts.
Initially, established in the summer of 2020, Stonybrook says its ILW desk has already completed several transactions.
“Our goal was to bring technology that delivers transparency, improved market intelligence, and a less intrusive price-discovery process for underwriters and buyers, and we are thrilled by the support of the ILW marketplace,” explained Stonybrook Vice President Dan Butzbaugh.
“It is another example of Stonybrook developing new products and services to assist the (re)insurance market,” added Principal and CEO, Joe Scheerer.
Players in the insurance-linked securities (ILS) market have faced issues with ILW pricing in the past due to a lack of updates and transparency.
Complaints centre around the inaccuracy of ILW prices on some pricing sheets, meaning trades are rarely able to be done at the prices listed.
Stonybrook’s service aims to address this problem by automatically replying within minutes with an attached sheet showing up to date ILW pricing that is realistic and a better starting point for negotiation.
“We are delighted to launch this service at a time when parametric triggered products such as ILWs are gaining in popularity because of the simple and speedy resolution of payments,” Scheerer stated.
Paul Kneuer, Managing Director at Stonybrook, also commented: “Stonybrook Capital is a leading investment bank for CAT exposed insurers. We can leverage that expertise in the ILW arena as well.”