Blue Lotus Re Ltd. is a newly launched collateralized reinsurance sidecar vehicle from Bermudian specialty P&C re/insurer Sompo International, part of the Sompo Holdings global re/insurance giant. Blue Lotus Re has been capitalised with $62 million and provides collateralized catastrophe reinsurance capacity.
Blue Lotus Re Ltd. is a Bermuda-domiciled special purpose insurer (SPI) established by Sompo International to help it deepen its relationships with ILS investors and to provide retrocessional protection to its catastrophe book of business.
Sompo International already has strong ILS and capital market investor relationships through its Blue Capital Management third-party capital unit and the history of the firm’s sidecars under Montpelier and cessions under Endurance, before it was acquired by Sompo.
Blue Lotus Re Ltd. has been capitalised with $62 million of third-party investor capital for the 2018 underwriting year and has entered into a retrocessional agreement with Sompo International, likely a quota share of the re/insurers catastrophe reinsurance book.
The Blue Lotus Re Ltd. reinsurance sidecar is seen as an important step in Sompo International’s third-party capital strategy, expanding on its already successful work with third-party capital in the Blue Capital Management units funds and vehicles.
The sidecar helps Sompo International to create new and deeper relationships with institutional investors looking to access the returns of catastrophe reinsurance underwriting from an established and respected global business.
TigerRisk Capital Markets & Advisory (TCMA) was the sole structuring and placement agent for the Blue Lotus Re sidecar issuance, providing advice throughout the transaction, to create an optimal solution for Sompo International.
TCMA provided structuring and portfolio risk modelling support, facilitate investor relations, provided input on transaction terms and helped to draft investor and deal documentation for the Blue Lotus Re Ltd. reinsurance sidecar arrangement.
Well over one billion dollars of reinsurance risks have been ceded through both new and renewal reinsurance sidecars for the 2018 underwriting year. We expect to see more come to market for the mid-year renewals.
For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.