US litigation finance firm Burford Capital has applied for a licence to establish an insurance business in Guernsey, according to a report by CityAM.
The new business, which is reported to be awaiting final licensing by the Guernsey Financial Services Commission, will offer insurance cover for clients involved in litigation who may face significant costs orders in the event of losing a case.
Burford previously offered ‘adverse costs’ insurance via an agency relationship with MunichRe. However, most of those policies were for less than £3 million and were aimed at the mid-market. The new business is aimed at more complex litigation and arbitration cases.
Burford London Managing Director Craig Arnott said: “It is to fill a hole we perceived in the market. Adverse cost insurance wasn’t available for many of the matters we were dealing with – big chunky commercial matters, competition matters and big arbitration matters.”
He said Burford’s clients needed cover ranging from £15 million to £25 million. He anticipated the new insurance business would initially write up to 20 policies a year, focusing on cases for which Burford had already provided funding.
If approved, the new business will be called Burford Worldwide Insurance. It is backed by Burford’s balance sheet and reinsurance arrangements, which have been placed by Marsh & McLennan subsidiary Guy Carpenter & Company.