Accelerant, the insurtech that aims to help its members exchange and transfer risk more effectively and also connect them with long-term capital, has launched a $175 million reinsurance sidecar structure named Flywheel Re.
Flywheel Re has been designed to provide multi-year risk capital to Accelerant and its underwriting-led specialist members.
It’s the insurtech’s first move to bringing the capital markets into its capacity provision, with institutional investors backing the $175 million Flywheel Re sidecar.
Accelerant works with its underwriting-led members to deliver profitable growth in niche specialties of insurance and reinsurance business.
The sidecar, Flywheel Re, has been designed to have a long-term structure, which the company believes is “starkly different from typical historical catastrophe-focused sidecars.”
This approach “continues to distinguish Accelerant as an innovator in driving better outcomes across the insurance industry,” the company said.
Flywheel Re is notable as a sidecar for a number of reasons, not least that it’s the first to be launched by an insurtech.
For years now we’ve been highlighting the potential for insurtech’s to work with institutional investors to deliver efficient reinsurance capacity to their users, or programs of insurance business they underwrite.
Founder Jeff Radke has a track-record in innovative business models across insurance and reinsurance, with Flywheel Re a clear demonstration that he and his team recognise the potential to match data-driven underwriting with institutional capital for better outcomes.
Accelerant operates as a kind of program carrier platform, working with its underwriting team Members.
Flywheel Re will give Accelerant a dedicated and competitively costed source of reinsurance capital, with a long-term appetite to support program business, which makes perfect sense for a carrier platform of this kind.
“We’re thrilled to launch Flywheel and put it to work on behalf of our Members,” explained Jeff Radke, CEO and co-founder of Accelerant.
“This is a natural extension of the work we’ve been doing to support specialist underwriters with additional capacity. But it also marks a major milestone in our journey as a company, and for the insurance industry at large.
“We are now expanding our focus and diversifying sources of capital alongside the traditional reinsurance market by bringing our portfolio of low-volatility commercial SME risks to institutional investors in an innovative structure that efficiently supports our Members’ growth.”
Goldman Sachs & Co. LLC was the exclusive placement agent to Accelerant for the Flywheel Re sidecar, while Sidley Austin LLP acted as legal counsel.
Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.