Arbitration and litigation finance provider Burford Capital is launching its own insurance company to offer legal finance clients a new insurance product to address cost risk in commercial litigation and arbitration.
Burford has applied for a licence to establish Burford Worldwide Insurance as a wholly-owned Guernsey-incorporated insurer, and expects to receive approval from the Guernsey Financial Services Commission "imminently".
The firm said it would have significant capital available through Burford Capital’s balance sheet and extensive reinsurance arrangements negotiated with leading reinsurers.
Burford has written more than 50,000 such policies through an English insurance business in a relationship with reinsurer MunichRe, focused on the middle market. It said that this market had declined following regulatory changes, but adverse cost risk remained a key issue for larger complex litigation and arbitration. It is focusing on the market for costs of claims in the region of £20 million.
Marsh Management Services Guernsey is advising Burford and will act as its insurance manager.
“Burford has extensive experience in providing adverse costs insurance. We brought our prior business to an end as its agency structure and its increasing platform costs were undesirable, but we see considerable demand for adverse costs coverage in the large dollar claims in which we specialise, and it makes eminent sense for us to meet that demand through our own insurance provider,” said Christopher Bogart, chief executive of Burford Capital.
Dominic Wheatley, chief executive of Guernsey Finance, added: “This is positive news for Guernsey, and reflects our insurance industry’s particular ability to meet niche demand in highly technical and innovative areas. Guernsey continues to be seen on a global stage as a jurisdiction for high quality specialist insurance activities.”
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