Arbitration and litigation finance provider Burford Capital Limited is setting up its own insurance firm in Guernsey. Experienced in providing adverse costs cover – as it had a middle market English insurance business built on an agency relationship with Munich Re – the investment management company is now on track to launch its wholly-owned insurer amid significant demand, particularly in larger cases.
Announcing the move, Burford Capital cited limited capacity in the insurance market for litigation claims with adverse costs in the area of £20 million. It is this hole that the litigation funder wishes to address, and it is well on its way after receiving outline approval for the Guernsey-incorporated provider. Full regulatory approval for Burford Worldwide Insurance is expected to follow shortly.
“The added risk of adverse costs exposure has the potential to dampen the ability of clients to pursue significant litigation in cost-shifting jurisdictions like the UK, particularly in high-cost areas such as competition, and with particularly harsh consequences for law firms,” noted Burford Capital managing director Craig Arnott in London. “Burford is pleased to offer a product that specifically mitigates that risk for the clients and law firms.”
Guy Carpenter & Company has placed the reinsurance, while Marsh Management Services Guernsey Ltd serves as insurance manager of the up and coming entity.
“Burford has extensive experience in providing adverse costs insurance,” said Christopher Bogart, chief executive at Burford Capital. “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.”
Publicly traded on the London Stock Exchange, Burford Capital has principal offices in New York, London, Chicago, and Singapore. Its new insurance business awaits final licensing by the Guernsey Financial Services Commission.