ACE launches $95m Altair Re collateralized reinsurance sidecar

The latest company to show its third-party reinsurance capital management ambitions by launching a sidecar is ACE Limited. ACE, one of the world’s largest multiline property casualty insurance and reinsurance groups, has announced the formation of a special purpose vehicle called Altair Re, which is capitalised to the tune of $95m and will be used as a sidecar to provide additional collateralized capacity to support its global reinsurance business.

The capital held within the Altair Re reinsurance sidecar will be used to broadly support ACE Tempest Re’s global property catastrophe reinsurance portfolio.

Jacques Q. Bonneau, Chairman of ACE Tempest Re Group, commented; “Altair Re gives us additional capacity to meet the diversified property catastrophe needs of our insurance and reinsurance company clients.”

The launch of Altair Re sees ACE step firmly into the third-party capital management arena, looking to use the sidecar to attract capital market investors capital and leverage its underwriting resources to deploy it as reinsurance capacity.

“Capital markets investors will benefit from ACE Tempest Re’s proven track record of conservative underwriting and consistent profitability, while the additional capital will enable us to take advantage of opportunities we see in the global property catastrophe market,” added Bonneau.

Willis Capital Markets & Advisory acted as structuring and placement agent on the setup and launch of Altair Re.

So ACE has now clearly shown its ambitions to capitalise on investor interest in the reinsurance and catastrophe risk space. We suspect that this will not be the last sidecar launch before the mid-year renewals as insurance and reinsurance groups look to come to terms with the new alternative reinsurance capital trends.

2013 has seen a number of new sidecar launches as insurance and reinsurance groups look to capitalise on the interest in the potential returns from reinsurance and catastrophe risk being shown by third-party investors. Recent launches include, PartnerRe with the $75m Lorenz Re, Everest Re with the $250m Mt. Logan Re, Validus capitalised AlphaCat 2013 to $230m, Argo launched Harambee Re and RenaissanceRe launched $185m Upsilon Re II,

Read our article on Chairman of ACE European Group, Andrew Kendrick’s comments on ‘fast capital’ and the need to embrace third-party sources of reinsurance capacity.