Beyond Traditional: Emerging Risks and Reinsurance Solutions Transactional Risks | W&I & M&A | Carbon & Carbon Credit | Parametric | Crisis Management | Special Risks
Updated: Oct 5
The risks we are discussing with the market today are not necessarily the same ones we were discussing a few years ago.
M&A activity, climate volatility, carbon markets, geopolitical developments and new financial exposures are creating risks that are more complex, more interconnected and, in many cases, difficult to address through conventional structures. This is also changing the role of specialist reinsurance.
At Argentum Re, we work with retail and reinsurance brokers across different regions, supporting them with access to international capacity and solutions for both established and emerging risks. As a Lloyd’s broker, our access extends across Lloyd’s as well as the wider global market, which gives us the opportunity to approach each risk according to its particular characteristics rather than trying to fit every submission into a standard solution.
Transactional Risks, W&I and M&A
While clean exits and reduced reliance on escrow remain important, the role of W&I today goes further.
Depending on the transaction, W&I can help address negotiation gaps, provide greater certainty around post-closing liabilities and support both buyers and sellers in structuring a deal.
We are also seeing a broader transactional risk market, with bespoke solutions for exposures arising from individual transactions.
For us, this is an area where understanding the transaction itself is just as important as understanding the required cover.
Carbon and Carbon Credit Reinsurance
Carbon markets are creating a rapidly evolving set of exposures.
As both compliance and voluntary markets develop, the discussion is no longer limited to the environmental value of a carbon credit. There are financial, transactional, political, regulatory, technological and operational risks attached to the projects, credits and transactions themselves.
The range of solutions available is also becoming significantly broader. Today, the main areas we explore with our business partners and broker clients include:
• Carbon Credit Delivery & Project Failure
• Carbon Credit Invalidation, Reversal & Permanence
• Carbon Credit Transactional, W&I & Counterparty Risks
• Carbon Political, Regulatory & Article 6 Risks
• CORSIA & Corresponding Adjustment Solutions
• Carbon Finance & Non-Payment
• Carbon Project, CCS & Technology Risks
• Carbon Parametric & Climate Risks
• Carbon Credit Integrity, Verification & Emerging Risks
Each of these categories represents a much broader range of underlying exposures and potential structures — from non-delivery, invalidation, reversal and replacement costs to project failure, ownership and transactional risks, political and regulatory events, CORSIA eligibility, corresponding adjustments, verification, technology performance and other emerging exposures.
It is still a developing market, and solutions continue to evolve alongside regulation, carbon standards, technologies and the markets themselves.
At Argentum Re, we work with our business partners and broker clients to explore these developing exposures and access carefully structured reinsurance solutions through the international specialist markets.
Parametric Reinsurance
Parametric is another area receiving much more attention, particularly as businesses try to manage the financial consequences not only of climate and weather-related events, but also of several other factors, including but not limited to war, political risks and financial risks.
The concept is relatively straightforward: instead of relying only on an assessment of physical damage, the structure responds when a predefined and independently measurable parameter is reached.
This can be particularly relevant for all sectors, not only limited to agriculture, renewable energy, tourism, infrastructure and supply chains, where an event can have a significant financial impact without necessarily producing a conventional physical damage loss.
Crisis Management
Crisis Management has also become particularly relevant in the current environment.
A serious corporate crisis does not need to begin with physical damage. Product contamination or recall, political violence, malicious acts, security incidents, supply-chain disruption and reputational events can quickly become operational and financial problems.
In these situations, the value of the solution is not limited to the financial response. Access to the right expertise and an effective response when an event is developing can be equally important.
Where do we see our role?
Not every risk needs a complicated solution. But when a conventional approach does not adequately reflect the exposure, there should be room to look further.
At Argentum Re, we work together with our local broker partners to understand the opportunity, approach the relevant markets and explore the most appropriate structure available through Lloyd’s and the wider markets globally.
And our focus remains very clear: to support our retail and reinsurance broker partners both for facultative and treaty/retro programs; in meeting their clients’ needs with the best solutions available.
Whether it is a new opportunity, a quotation request, an unusual exposure or simply a product you would like to form for your market(s), we are here for our local brokers with the global reach of specialist reinsurance solutions.
Global reach, local broker partnerships and access to specialist reinsurance solutions.
Comments