Geneva Re Ltd., a new Bermudian reinsurance company, has been launched as a partnership joint-venture by Ryan Specialty Group (RSG) and U.S. based insurer Nationwide that looks set to add capital efficiencies to both firms platforms.
Geneva Re Ltd. is a Bermuda domiciled reinsurance vehicle that has been set up by the pair as a way to enable growth opportunities for them in the specialty lines market.
In addition, the formation of Geneva Re expands on an already existing strategic relationship between RSG and Nationwide.
Nationwide will own 50% of the venture in Geneva Re, while RSG and RSG-related investors will hold the remaining 50%.
Michael D. O’Halleran, a senior advisor to RSG and the former Executive Chairman and a founder of reinsurance broker Aon Benfield will serve as Executive Chairman of Geneva Re, the company said.
Ryan Re, an RSG affiliated reinsurance managing general underwriter that is led by CEO and President Brian M. Boornazian (the former CEO of Aspen Re), will act as the exclusive underwriting manager for new reinsurer Geneva Re.
Geneva Re is expected to have the financial strength to accept a diversified portfolio of reinsurance business from Ryan Specialty Group underwriting programs immediately.
The funding of Geneva Re has not been revealed and it’s not clear whether any third-party capital is involved, at this stage.
Geneva Re is slated to begin underwriting as of July 1st 2019, subject to Bermuda Monetary Authority approval, the announcement said.
Nationwide is going to appoint Ryan Re as its exclusive underwriting manager for third-party property and casualty treaty reinsurance business flowing through Geneva Re, the joint-venture partners further explained.
Commenting on the launch announcement, Patrick G. Ryan, Founder, Chairman and CEO of RSG, said, “We are proud and excited to partner with Nationwide, a world-class financial institution whose financial ratings and performance are unquestionable. We also share a similar culture, which is critical to entering into a long-term relationship.
“RSG and its operating companies, RT Specialty and RSG Underwriting Managers, look forward to expanding the already successful relationship we have enjoyed with the Nationwide companies since our inception in 2010, and further enhancing this partnership with Geneva Re and Ryan Re. It has been our goal since RSG’s formation to more fully align our interest with our clients. Through Geneva Re, we will be able to accomplish this objective.”
“We look forward to furthering our relationship with Ryan Specialty Group, who is today one of our largest E&S / specialty distribution partners,” added Mark Berven, President and COO, Nationwide property and casualty. “This relationship will create new opportunities for both organizations to expand our reach and serve additional niche markets that are currently underserved.”
Mike O’Halleran said, “I am thrilled to be part of the new partnership between RSG and Nationwide. Ryan Re and Geneva Re, with the support of our founding shareholders, will immediately have significant financial strength and be able to accept a diversified portfolio of reinsurance business.”
Brian Boornazian explained, “I believe we are bringing an unprecedented proposition to the reinsurance market. Combining the quality and balance sheet strength of Nationwide (A.M. Best Rating A+ (Superior), FSC XV), the innovation and market presence of RSG, and the well respected and experienced underwriters will uniquely position Ryan Re to provide the security and underwriting insight that our brokers and clients desire.”
It’s an interesting tie up and one that promises to bring capital efficiencies to both the RSG and Nationwide platforms, extending their offerings and enabling them both to benefit from reinsurance capacity that can support growth and diversification.
RSG could benefit from a source of capacity that can back its programs, enabling the firm to retain and extract more of the risk premium margin from business it originates and underwrites.
At the same time, Nationwide could benefit from a source of reinsurance capital that helps it to better diversify, reduce cession costs and extract greater capital efficiency from its own balance-sheet.
Whether there is any third-party capital backing the joint-venture or not, the launch of Geneva Re is another fine example of hybrid approaches to bringing risk closer to the originators and enabling extra margin to be extracted from underwritten business.
Trends that are likely to drive new ventures in the industry over the coming years, as participants realise there are better ways to structure their own cessions and make use of reinsurance capital to the efficiency benefit of their capacity and enterprises.
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