Alturas Re Ltd., a new fully collateralised reinsurance sidecar vehicle, has been launched and successfully capitalised to the tune of $55 million, which will benefit the sponsor of the vehicle re/insurer AXIS Capital.
Alturas Re Ltd. was registered as a Bermuda based special purpose insurer in November and was marketed to investors towards the end of the year.
We’re told the Alturas Re sidecar features risks from the property and catastrophe space, with the vehicle set to provide Bermudian insurance and reinsurance firm AXIS Capital with both collateralised reinsurance and retrocession capacity support for its re/insurance portfolio.
The risk ceded through to Alturas Re, by AXIS Capital, will likely have been through a quota share arrangement between the pair, with the portfolio collateralised through capital raised from third-party investors and a share contributed by AXIS itself, as is typical with sidecar arrangements.
Alturas Re Ltd. issued a $55 million tranche of Series 2019-1 Class A Participating Notes, which are due March 10th 2023.
We’re told this Class A tranche from Alturas Re features collateralised support for a portfolio of insurance risk, so provides AXIS with reinsurance, while a forthcoming second tranche features collateralised support for the AXIS reinsurance portfolio, so provides retro.
It’s rare for sidecars to write insurance risks, with only a handful having done so in the past. One of these was Argo’s Harambee which wrote both insurance and reinsurance risks.
However it is possible that this Class A tranche from Alturas Re is the first ever to only contain a portfolio of insurance risks that was ceded to investors.
Alturas Re will now sit alongside other capacity providers that AXIS Capital works with, including its other third-party capitalised vehicles.
We’re told that a second 2019-2 layer of risk was also offered to investors from Alturas Re at the renewal, but at this stage we lack the information to say how large or successful that was.
There is likely to be a formal announcement on the launch of Alturas Re from AXIS Capital and we’ll update you if any further information on the new reinsurance sidecar becomes available.
For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.
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