Insurer and reinsurer Aspen Insurance Holdings Limited, and asset manager PIMCO, have announced the launch of Pando Re Ltd., a Bermuda-based, casualty focused collateralised re/insurer that act as a reinsurance sidecar and help to drive growth of third-party capital and fee income for Aspen Capital Markets.
Under a long-term agreement unveiled today, Aspen will be the sole cedant to the collateralised re/insurer and PIMCO will be the exclusive investment manager for Pando Re.
Newly launched Pando Re will participate in Aspen’s casualty insurance, global professional lines insurance, cyber insurance, and cyber reinsurance lines of business via a multi-year quota share agreement, under which Aspen will receive loss coverage, pay premiums, and earn commissions.
As such, this is the latest casualty reinsurance sidecar structure to be launched, as asset managers display their expanding appetite for access to the returns of longer-tailed casualty business.
The pair explain that the cession incepted on January 1st, 2024, with the capital to support the casualty-focused reinsurance vehicle’s business plan is being provided by investments from a PIMCO managed fund.
It’s understood that Pando Re’s investment portfolio will consist primarily of investment-grade fixed income assets managed by giant asset manager PIMCO.
“We believe now is the right time to bring additional third-party capital to the casualty market and are excited to partner with PIMCO, a leading investment manager. We see a significant opportunity for this new capacity to support the needs of our clients, cedants and distribution partners against a backdrop of reduced appetite from the reinsurance market,” said Brian Tobben, CEO of Aspen Capital Partners.
“We are delighted to work with PIMCO, who share a similar vision of long-term value creation through highly-aligned risk management on both the asset and liability sides of the balance sheet. We look forward to working with our partners to leverage Pando Re and develop new solutions for the casualty market,” he added.
Aspen highlights how the launch of Pando Re is a continuation of its strategy to partner with third-party investors by aligning “attractive underwriting risks with the right source of capital.”
Aspen Capital Markets, the third-party and alternative reinsurance capital management unit of global re/insurer Aspen, grew its funding for third-party capital and insurance-linked securities (ILS) vehicles in 2023, with a roughly 31% rise in assets under management as well as a rise in fee income.
Pando Re stands to benefit the company’s insurance and reinsurance platforms through a multi-year capacity agreement, while driving further growth of third-party capital and fee income for the Aspen Capital Markets unit.
Harin de Silva, Managing Director at PIMCO, said, “As a long-standing partner of insurance companies, PIMCO is excited to work with Aspen developing holistic solutions for the casualty insurance market. The nexus of insurance underwriting and investment management has been and continues to be a core focus for PIMCO.”
Deutsche Bank Securities Inc. was the exclusive financial advisor to Aspen and acted as the placement agent for the Pando Re casualty sidecar transaction.
Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.
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