Blue Capital Reinsurance Holdings Ltd. (BCRH), the exchange listed collateralized reinsurance subsidiary of Bermuda reinsurer Montpelier Re, has deployed $143m of the capital raised from its IPO at the 1st January reinsurance renewals.
Blue Capital Re raised $174m, after costs, when it launched. $125m was raised from its initial public offering (IPO) on the New York Stock Exchange and a further $50m from a concurrent private placement with a Montpelier Re subsidiary.
Blue Capital Re said that it will retain approximately $14m of the capital to cover cash obligations, including its first three regular quarterly dividend payments, from its first year of operations.
The remaining $160m will be deployed to collateralize a portfolio of property catastrophe indemnity reinsurance contracts and related instruments during the first year of the reinsurers operations and the majority of this was deployed at the recent key January reinsurance renewals.
As of the 16th January, Blue Capital Reinsurance Holdings reports that it has deployed $143m of capital, or 89% of the $160m available for deployment, across a diversified portfolio of property catastrophe reinsurance contracts. The remaining $17m of deployable capital will be put to work at the other reinsurance renewal points during 2014, likely April for any Asian contracts or June/July for U.S. property catastrophe risks.
Recently Blue Capital Reinsurance Holdings established a retrocessional reinsurance agreement with Montpelier Re subsidiary Blue Water Re Ltd., giving the Blue Capital Management and Montpelier Re third-party capital platform even greater flexibility in how it manages its portfolios of risk and augmenting the capacity of Blue Water Re to underwrite more reinsurance business itself.