Cedar Trace ILS investors may provide capital to support 2027 Lloyd’s syndicate launch

Investors backing insurance-linked securities funds under the management of Cedar Trace Capital Management are expected to provide some of the capital to support the planned launch of a $300m Lloyd’s syndicate for the 2027 underwriting year, by group company Cedar Trace Underwriting.

Cedar Trace Underwriting said today that it has received in-principle approval for its first syndicate from the Lloyd’s Council at its meeting on 2nd September.

The syndicate will be led by Richard Holden, CUO, Cedar Trace and is planned to write a diversified reinsurance portfolio, as well as a delegated direct insurance portfolio.

This marks a meaningful expansion of Cedar Trace’s existing Bermuda-based reinsurance and asset management platform into the Lloyd’s market.

Existing shareholders of affiliated insurer Mereo Insurance is expected to be the main source of capital to support the Cedar Trace Underwriting syndicate at Lloyd’s.

But the company also revealed that some of the investors backing ILS funds operated out of Bermuda through Cedar Trace Capital Management and Cedar Trace ILS are also expected to help finance the Lloyd’s venture.

Cedar Trace is a management company set up in 2024 and led by industry veteran Brian Duperreault and is affiliated with Mereo Insurance Ltd, the Bermuda-based reinsurance company led by Lloyd’s veteran David Croom-Johnson. Croom-Johnson will serve as executive chairman of the new Cedar Trace syndicate at Lloyd’s.

Duperreault commented, “We are excited to be able to bring our experienced and talented team to Lloyd’s and to bring new relationships, new business and new capital to the market. We have built out our Bermuda platforms to over $1bn of GWP in 2026 and entry into Lloyd’s in 2027 is a natural next step in scaling our ambitions. I would like to thank the team for getting us this far and in particular, Fergus Reynolds, one of our partners, for his outstanding contribution”.

Holden added, “Lloyd’s is obviously a market that David and I know extremely well and the capital and licensing advantages that it brings allow us to expand our offerings to our existing reinsurance relationships and to bring new delegated coverholders to the market.”

Lorraine Harfitt, CEO, Asta, who will provide managing agency and associated services to the syndicate, stated, “We are delighted to support Cedar Trace as it establishes its Lloyd’s platform. The strength of the team, combined with its innovative approach to capital and underwriting, makes this an exciting addition to the market.”

The syndicate will provide access to a broader range of business for the Cedar Trace platform, likely also providing additional origination sourcing for its ILS fund strategies as well.

While third-party capital investors backing those ILS funds are also set to gain exposure to the new Lloyd’s underwriting operation as well, through helping to funds its start-up.

We understand that the investors set to back the launch of this new syndicate for Cedar Trace could potentially utilise the Lloyd’s ILS structure London Bridge 2 PCC to fund the venture, although specifics as to how the funding will occur are not currently available.

However, that certainly seems a possibility, given London Bridge has been utilised to fund syndicate launches a number of times over the last couple of years, providing investors with an efficient route to deploy their capital into the Lloyd’s market.