Tony Ursano is the New York-based president of TigerRisk Partners L.L.C. He joined the firm in April 2015 from Willis Towers Watson P.L.C., where he was founder and CEO of Willis Capital Markets & Advisory for six years and a member of the Willis Towers Watson group executive committee. Prior to joining Willis Towers Watson, he was vice chairman of the financial institutions group at Banc of America Securities L.L.C. Mr. Ursano recently spoke with Business Insurance Reporter Matthew Lerner about growth and changes in the insurance capital markets. Edited excerpts follow.

Q: Can capital really be called “alternative” anymore, or has it become mainstream?

A: I think we could rename alternative capital as core capital or aligned capital, because it’s now become a part of many or most catastrophe placements, it’s developing the same sort of strategic and long-term relationships the traditional market has had for some time, and it’s playing in size and on terms consistent with traditional capital. So I think the word core or aligned capital is a fair way to describe what it has evolved into.

Q: Has TigerRisk increased its focus on such capital and its deployment? Why?

A: We’ve always been focused on and committed to finding as much capacity as we can for the benefit of our clients. We were an early adopter in believing that this capital was available in size and something that should be accessed to maximize the reinsurance capacity available to our clients. We believe there is a mountain of capital on the sidelines, and so the third-party capital, or the core capital market, the aligned capital is a key part of our strategic positioning in the marketplace.

Q: Does TigerRisk see increased opportunity in the deployment of such capital and the use of capital markets?

A: Yes. We believe that this capital is going to be disruptive and that it offers a cost-effective alternative to traditional capital. We see it looking for ways to diversify and to participate in more and more diversified perils. We think it’s going to be available in size. We think it’s going to be cost-effective, and we think it’s going to be flexible in the way that it gets structured to meet client needs.

Q: Are clients seeking solutions employing different types of capital in capital markets? And are they doing this for added flexibility entailing cover or other reasons?

A: I think to some extent it’s the simple rule of supply and demand. This capital provides incremental capacity and, therefore, cedents are smart to seek out and participate in the capital markets in order to maximize the amount of capacity available to them. They view it as access to a new and deep market that has some of the largest institutional investors in the world behind it.

We think there are a select group of clients and cedents who now are contemplating direct access and direct relationships with the end investors. They’re looking for long-term, strategic-oriented relationships with investors who can deploy in size and on a long-term basis.

Q: Are the structures utilizing such capital evolving? Are there more choices available now?

A: I think the structures are definitely evolving, and the capital has become more flexible. The capital has been more creative in terms of how it participates. We’ve seen a number of [insurance-linked securities] funds form Lloyd’s syndicates. We’ve seen a number of ILS funds form rated vehicles. We are seeing pension funds considering the same strategies. There are casualty side-car structures that now exist. So they’ve been evolving rapidly, and we expect them to continue to evolve in search of the ability to be competitive to the traditional market.

Q: Is the client profile changing? Is it expanding? Are there more of them, more different types?

A: We definitely see a trend towards emerging risks. Cyber is something that the third-party capital and ILS space has been thinking about and working on for some time. We also see more government sponsored risk solutions looking to or towards the ILS or core capital market. We think there will be more transfer of risk from the public to the private sector, and we think ILS will play a key role in that transition.

Q: How is technology affecting or changing your business?

A: I think we’re in the second inning of a nine-inning game in terms of the disruption and transformation that technology is going to impose on our industry. I think that the expense base of the industry has to be dramatically reduced and that technology is going to play a big role in assisting in driving that reduction, whether that’s through artificial intelligence, through data science, through robotics or otherwise.

Technology is going to drive down costs. Technology is going to improve underwriting accuracy and will fundamentally, I think, transform the nature of the industry over the next 10 to 20 years. But we’re early, and I think those companies that get ahead of the curve, that start to change the type of talent that they have in their organization, that start to think more broadly, and that start to implement aggressively on technology, are going to emerge as the winners in the future.