International specialty insurance and reinsurance company Argo Group International Holdings has renewed its fully-collateralized reinsurance sidecar, Harambee Re, for the 2014 underwriting year, according to an announcement from the firm.
Argo first launched the Harambee Re sidecar a year ago, hailing it as the first sidecar to underwrite both insurance and reinsurance business. The fact that it wrote both sides of the market, from Argo’s specialty focused book, made the sidecar an attractive proposition to third-party investors as they typically write reinsurance or retrocessional business not primary insurance.
In its announcement today Argo said that the renewal of Harambee Re shows the firms appetite to continue leveraging capital from sidecar partners, following last year’s Harambee Re 2013-1. Harambee Re 2014-1 follows on from its predecessor in helping Argo to further diversify its sources of reinsurance and retro capital by partnering with capital markets investors.
Harambee Re 2014 follows the same strategy as last years sidecar, supporting two of Argo’s core business units, the firms Bermuda reinsurance operation Argo Re and its excess and surplus lines specialist arm Colony Specialty. In 2014 Harambee Re will include both a reinsurance and an insurance portfolio, providing reinsurance for specific property portfolios underwritten by the two business units.
Argo Group President and Chief Executive Officer Mark E. Watson III commented on the renewal of Harambee Re; “We are pleased to continue support of our business growth objectives through this vehicle, which is larger for 2014 than for 2013. Harambee Re enables us to increase our underwriting capacity for key business units without adding materially to the Argo Group’s overall exposure to volatility associated with catastrophe losses.”
Argo did not disclose the size of the Harambee Re sidecar, as it did a year ago. It said that Harambee Re underscores the firms strategy of “Efficiently capitalizing on market opportunities and building upon the company’s previous insurance-linked securities transactions.”
Argo also recently closed its latest catastrophe bond, the $172m Loma Reinsurance (Bermuda) 2013-1.