Hudson Structured Capital Management (HSCM), the reinsurance, insurtech, insurance-linked securities (ILS) and transportation focused investment manager, has participated in the launch financing of a new life and annuity reinsurance firm named Martello Re Limited.
Martello Re has been launched as a new Class E Bermuda-based life and annuity reinsurance company.
The company has initial equity of $1.65 billion and this financial support comes from established player Massachusetts Mutual Life Insurance Company (MassMutual), private equity investor Centerbridge Partners, private banking giant Brown Brothers Harriman, and a group of institutional investors and family offices.
Among the institutions that have also provided financial support to the launch of Martello Re, Hudson Structured Capital Management is included.
Barings and Centerbridge are set to act as asset managers for Martello Re.
Initially, Martello Re’s focus will be on providing MassMutual and its subsidiaries with reinsurance capacity to cover their current product offerings.
After that, Martello Re will offer life and annuity reinsurance services selectively to other top insurers in the market segment.
The start-up is getting a significant launch boost, with MassMutual and subsidiaries set to initially reinsure approximately $14 billion of general account liabilities to Martello Re.
In addition, they will enter into a flow arrangement to secure reinsurance for new business as well.
Both of these transactions are expected to close in February 2022 and have received regulatory approval.
“The launch of Martello Re represents a unique and strategic opportunity for MassMutual that supports our future growth. By coming together with established, world-class partners to build a leading reinsurer, we will be able to more efficiently manage risk and deliver on our long-term commitments while providing ongoing value to our policyowners and customers,” explained Roger Crandall, Chairman, President and CEO, MassMutual.
“Today’s announcement underscores Barings’ deep expertise in alternative asset management and insurance,” added Mike Freno, Barings Chairman and CEO. “We are proud to be teaming with leading firms like MassMutual, Centerbridge Partners and Brown Brothers Harriman to create and support an innovative new player in the reinsurance field.”
Centerbridge’s Co-Founder and Managing Principal Jeff Aronson also said, “The creation of Martello Re is ground-breaking for the reinsurance sector. We’ve had a longstanding relationship with MassMutual, Barings, and Brown Brothers Harriman and we couldn’t be more grateful for their support in including us in this innovative partnership. We also appreciate the support from our clients who participated in the capital raise for Martello Re. We look forward to serving them and Martello Re in helping to create a full-spectrum, industry leading asset management solution for fixed income and private credit.”
“We have enjoyed long-standing relationships with Barings, MassMutual, and Centerbridge,” commented Jeff Meskin, Brown Brothers Harriman Partner and Head of BBH Private Banking. “Joining together with these firms to create Martello Re for the benefit of our wealth management clients will be an exciting journey. My partner, Taylor Bodman, and I look forward to joining the Board of Directors and to working with the Martello Re team and our partners to grow this unique reinsurance platform.”
Dennis Ho will be the CEO of Martello Re, a 22-year industry veteran and life actuary who most recently founded an insurtech named Saturday Insurance. Ho has also previously held a range of other leadership roles, including CEO for Longitude Re, Managing Director at BlackRock Solutions, and Head of US Life Insurance Solutions at Deutsche Bank.
“This is an ideal time to build a new life reinsurer given the growing consumer demand for retirement products and challenging market environment for insurers,” explained Ho. “Through Martello Re, we’ve combined the DNA and core values of MassMutual with the agility of a start-up to create a premier reinsurer that will provide the industry with access to a unique combination of product expertise, capital, and investment capabilities that is not currently available today.”
The life and annuity reinsurance space is increasingly attractive to investors at this time, with significant economic benefits to backing these reinsurers, or allocating capital to support their growth.
Hudson Structured with its expertise across the insurance and reinsurance value-chain will hope to leverage its expertise to help Martello Re become a leading player in the market it targets.