ProGlobal vow to press ahead with this cell, after an earlier venture in 2016 was delayed
US run-off carrier ProTucket yesterday confirmed it had launched its first cell, backed by $35m from Swiss Re.
ProGlobal established ProTucket in Rhode Island last year to provide run-off portfolio transfer solutions and hopes to be doing its first US business early next year.
This followed Rhode Island’s passing of the Voluntary Restructuring of Solvent Insurers Law in 2015.
It meant for the first time in the US, insurers and reinsurers could cede run-off commercial books in a similar fashion to Part VII of the UK’s Financial Services and Markets Act.
ProGlobal, which has been helping European and Latin American companies put unprofitable parts of their business into run-off for 25 years, had been looking to enter the US market in 2016, but were held up for reasons that would not be divulged.
But Mory Katz, chief executive of ProTucket and ProGlobal’s US managing director, said he was confident this time around there would be no delays, and that it would “change US insurance”.
Speaking to GR at the Monte Carlo Rendez-Vous, Katz said: “I’ve done some insurance innovations before in my career and this one is going to happen.
“There’s going to be a lot of interest in providing this service, but what everyone has been waiting for is for someone to provide the first proof of concept.
“We were the first to form a carrier and now we’re hoping we’ll be the first to provide proof of concept.”
PwC has estimated the market for selling off individual portfolios of US insurers and reinsurers to be at $350m.
ProGlobal chief executive Artur Niemczewski said the main challenge with implementing their plans is that it has never been done before in the US.
But he said he expects to see a boom in the uptake of this service across the industry once it has been shown to work.
He told GR: “Once you set a legal precedent that it’s working and it’s legally valid, then everyone else will say they want to be in.
“That first transfer is so critical for the industry that we really must get it right on the first attempt.”