RenaissanceRe forms Timicuan Reinsurance III sidecar bringing more capacity to Florida

by Artemis on June 4, 2012

Bermuda based reinsurance group RenaissanceRe Holdings Ltd. have launched the latest version of their Timicuan sidecars with the announcement of the formation of Timicuan Reinsurance III Ltd. With the launch of Timicuan Re III RenaissanceRe will create additional capacity for the Florida homeowners insurance market and seek to capitalise on demand in the state and rising rates at the start of the Florida hurricane season.

Renaissance Re and their sidecar subsidiary DaVinci Reinsurance have both entered into a fully-collateralized reinsurance agreement with Tim Re III. Under this agreement Renaissance Re and DaVinci Re will cede to Timicuan Re III a defined portfolio of their Florida homeowners property catastrophe business, comprising primarily hurricane risks for Florida insurers during the 2012 hurricane season. Investors including RenaissanceRe have capitalised Timicuan Re III with $55m of equity capital and the entity will be managed by Renaissance Underwriting Managers, Ltd.

Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., commented; “We are pleased to announce the formation of Tim Re III and continue our track record of working with the capital markets to provide additional reinsurance capacity. Through this endeavor, we are able both to serve our customers’ needs and design a facility that allows investors to invest efficiently in the Florida reinsurance market.”

The previous Timicuan sidecar vehicles have been seen as opportunistic reinsurance sidecars, established to take advantage of rates or a lack of capacity in the Florida market, and so offering RenaissanceRe an opportunity to profit from reinsurance market conditions. Tim Re III has likely been established for the same reasons but also coincides with strong investor demand for reinsurance-linked investments and so allows RenaissanceRe to capitalise on investor demand for risk at this time to provide them with increased underwriting capacity.

RenaissanceRe launched the $60m Timicuan Re II in June 2009.

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