The importance of capital to mutual insurers

The importance of capital to mutual insurers

Ready access to capital has been highlighted by members of the International Cooperative and Mutual Insurance Federation (ICMIF) as being one of the key challenges for them. At ICMIF's Paris conference in 2003 over 90% of the delegates anticipated that they would need capital in the next ten years. Addressing the issue of access to capital for European mutual insurers, Shaun Tarbuck , ICMIF's chief executive, says that while larger mutuals are able to go direct to the capital markets to raise subordinated debt, it is much more difficult for small to medium sized mutuals. Here Mr Tarbuck highlights the unique benefits of subordinated debt products (funded in the capital markets via Collateralised Debt Obligation (CDO) transactions) for European mutual insurers. ICMIF have recently partnered with Merrill Lynch, Benfield Advisory and Cohen Bros to offer a unique subordinated debt program for its members.