City3k is hoping to generate a new market with the launch of an online site for trading debt between insurers and
reinsurers.
The debt exchange is a precursor to a reinsurance trading platform that will be launched later in the year.
Apart from identifying debtors, the site's main purpose will be to
enable trade, either through arbitrage or debt swapping, between companies.
Chief executive and founder Alex Letts points out the potential of the run-off market alone.
“Sizing the debt market precisely is impossible, but as an example of the potential scale of the problem, a recent Swiss Re report estimated that there is currently $184bn (£126bn) in liabilities in run-off,” he said.
“Our research shows that about $50bn (£34bn) of this is problematic.”
The debt exchange has already listed 1,000 debts available to trade, including those posted by Equitas, NRG, a major Dutch reinsurer now in run-off, and KWELM Management Services.
Membership of the exchange costs £2,000 per annum, with the first 20 listings free. After that, listings will cost £100 each.
City3k's was founded in May 2000 and current shareholders include Brit and KPMG.
The website can be found at city3k.com.
