Bermuda saw another strong year of new company registrations for catastrophe bond, insurance-linked securities (ILS) and collateralised reinsurance related vehicles in 2022, with cat bond formations leading the way.
There were 24 new special purpose insurers (SPI’s) registered in Bermuda in 2022, with 22 of those restricted and 2 unrestricted, in terms of the business they can undertake.
In addition, Bermuda also saw two registrations of its newer Collateralized Insurer class of company last year.
In the main, the SPI and ILS-related registrations are catastrophe bond issuers, mortgage insurance-linked securities (ILS) vehicles, or newly licensed structures for a range of collateralised reinsurance uses and as quota share sidecar vehicles.
In 2021, mortgage insurance-linked notes issuers made up the largest share of the ILS-related registrations in Bermuda.
But in 2022, the catastrophe bond market was the largest source of company registrations logged by the Bermuda Monetary Authority (BMA).
Of the 22 restricted SPI’s registered in Bermuda, 12 were for catastrophe bond deals that we have tracked in our Deal Directory over the past year.
- Sanders Re III Ltd. – Allstate’s latest cat bond vehicle that issued three deals in 2022, the $550m Sanders Re III Ltd. (Series 2022-1), $287.5m Sanders Re III Ltd. (Series 2022-2), and $100m Sanders Re III Ltd. (Series 2022-3).
- Hestia Re Ltd. – Insurtech Kin Insurance’s cat bond vehicle that issued a $175m Hestia Re Ltd. (Series 2022-1).
- Montoya Re Ltd. – Inigo’s cat bond vehicle that issued a $115m Montoya Re Ltd. (Series 2022-1) and a $110m Montoya Re Ltd. (Series 2022-2).
- Gateway Re Ltd. – SURE’s cat bond vehicle that issued a $150m Gateway Re Ltd. (Series 2022-1) and is now back in the market with a $200m Gateway Re Ltd. (Series 2023-1).
- Long Point Re IV Ltd. – Travelers latest cat bond vehicle, that issued a $575m Long Point Re IV Ltd. (Series 2022-1).
- Yosemite Re Ltd. – Core Specialty’s first cat bond vehicle that issued a $65m Yosemite Re Ltd. (Series 2022-1).
- Marlin Re Ltd. – A new issuer for Florida cat bonds, but with two deals that never got completed, the Marlin Re Ltd. (Series 2022-1) deal for Weston and the Marlin Re Ltd. (Series 2022-2) deal for Southern Fidelity.
- Finca Re Ltd. – Canopius’ cat bond vehicle, that issued a $75m Finca Re Ltd. (Series 2022-1) deal.
- Commonwealth Re Ltd. – The Hanover’s cat bond vehicle, that issued a $150m Commonwealth Re Ltd. (Series 2022-1).
- Veraison Re Ltd. – GeoVera’s first cat bond vehicle, that issued a $150m Veraison Re Ltd. (Series 2023-1) at the end of the year.
- Foundation Re IV Ltd. – An as yet unused new cat bond vehicle for insurer The Hartford.
- Operational Re IV Ltd. – The latest vehicle for Credit Suisse’s series of operation risk bonds.
Another 6 SPI’s were for mortgage ILS deals from recognised sponsors. However, only four of those actually brought a deal to market last year, as the mortgage ILS market slowed significantly due to fixed income and capital market conditions being less conducive to issuance.
- Bellemeade Re 2022-1 Ltd. – Arch Mortgage Insurance’s first insurance-linked notes deal of the year.
- Triangle Re 2022-1 Ltd. – No known issuance.
- Home Re 2022-1 Ltd. – MGIC Investment Corporation.
- Eagle Re 2022-1 Ltd. – No known issuance.
- Radnor Re 2022-1 Ltd. – Essent Guaranty
- Bellemeade Re 2022-2 Ltd. – Arch Mortgage Insurance’s second insurance-linked notes deal of the year
There were 4 other restricted SPI’s registered in 2022.
One was the Fuschia Re Ltd. vehicle that we understood was a new structure for re/insurer Beazley.
Another was Ark Insurance Holdings’ $250 million collateralized reinsurance sidecar Outrigger Re Ltd.
The final 2 SPI’s registered in Bermuda in 2022 were Canal Re Ltd., which we understand to be a captive vehicle set up for Safepoint’s Louisiana focused Cajun Underwriters Reciprocal Exchange, and Amarok Re Ltd., which we’ve been unable to track so far.
As well as the 22 unrestricted SPI’s, 2 unrestricted special purpose insurers were also registered in Bermuda in 2022.
These were, Nightingale Re Ltd., a catastrophe risk focused investment vehicle established for PGGM, the Dutch pension fund investment manager, and the Jireh Re (SAC) Ltd. vehicle established for Sal Tucci’s new venture that we wrote about recently.
2022 also saw two new Collateralized Insurer class of company structures registered in Bermuda.
The first was Kettle Re Ltd., which was registered for Kettle, the reinsurance focused deep-learning and artificial intelligence (AI) insurtech.
The second was insurtech Vesttoo’s first underwriting structure in Bermuda, Vesttoo Alpha P&C Ltd.
Bermuda saw other ILS-related company registrations during the year, the most obvious of which are the two Fontana Re Class 3A and now rated reinsurers set up by RenaissanceRe for its casualty/specialty lines joint-venture, Fontana Holdings.
There were other interesting reinsurance registrations, where third-party capital backing is involved, such as Class C and Class E reinsurers set up to operate like sidecars for life and annuity underwriting and investment specialists.
In total, the Bermuda Monetary Authority (BMA) said that 80 re/insurance company’s were registered on the island in 2022, as well as 4 intermediaries.
That compares to 64 re/insurers and 14 intermediaries registered in Bermuda in 2021 and 67 re/insurers and 5 intermediaries in 2020.
In fact, 2022 saw the highest number of new registrations since 2014, a positive sign for accelerating growth of Bermuda’s re/insurance and ILS marketplace.
The increase in insurance and reinsurance company registrations in 2022 demonstrates the continued importance of Bermuda as a global hub for underwriting and risk capital management, while the ILS-related registrations reflect the islands market-leading role as an ILS domicile.
Bermuda’s continued success is testament to the ongoing work of its regulator and industry participants to evolve the marketplace and innovate the regulatory regime, as well as to the deep expertise located there, that continues to make it an attractive location for insurance, reinsurance and ILS business.
You can read about and view details of many of the Bermuda registered SPI’s and other ILS structures in our catastrophe bond Deal Directory, our mortgage ILS directory and our reinsurance sidecar listings.
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