Kilter and Blue Owl capitalise new Accelerant Risk Exchange reciprocal insurer WoodStar

A new insurer has been launched supported by third-party capital from investors and asset managers KKR-backed Kilter Finance and Blue Owl Capital, with newly rated WoodStar Reciprocal Exchange set to provide dedicated underwriting capacity through the Accelerant Risk Exchange.

WoodStar Reciprocal Exchange has received an ‘A-‘ financial strength rating from AM Best, while $220 million of 9.5% fixed surplus notes, due 2041, issued by the insurer have also been rated ‘bbb’.

WoodStar Reciprocal Exchange is backed by third-party capital from specialist and major investors, which include Kilter Finance, a firm that provides capital solutions to small and mid-sized insurers, and funds managed by alternative asset manager Blue Owl Capital, Accelerant said in announcing the partnership it has forged with WoodStar.

The reciprocal insurer, funded with more than $220 million of surplus notes and capital, will be managed by an Accelerant majority-owned attorney in fact that also has unrelated minority investor support.

Accelerant does not have any ownership interest in WoodStar itself, that comes from the third-party capital providers, but underwriting, distribution, claims and other services will be provided by Accelerant in the operation of the new reciprocal insurer.

WoodStar is designed to channel additional underwriting capacity to managing general agent (MGA) programs through the Accelerant Risk Exchange.

It is expected to provide its third-party capital supported insurance capacity to a select group of managing general agents that source specialty insurance opportunities, which will be vetted by and monitored by Accelerant.

As such, WoodStar represents an efficient way for Accelerant to introduce more third-party capital backed capacity to its risk exchange clients.

While for the third-party capital providers and investors supporting the new company, WoodStar offers a way to access returns from specialty insurance through an efficient platform for aggregating and sourcing insurance opportunities, via the Accelerant Risk Exchange.

It reflects the appetite institutional third-party capital has for accessing differentiated returns from the specialty insurance and reinsurance market, but via more direct access to tailored and aggregated portfolios of select insurance opportunities.

Accelerant said the launch of WoodStar underscores its “long-term strategy to bring low volatility, specialty commercial insurance risk closer to high quality institutional capital.”

The company has previously raised institutional capital to support underwriting via its Risk Exchange through the Flywheel Re reinsurance sidecar series.

Jeff Radke, CEO of Accelerant commented, “WoodStar is another step forward for our platform. We continue to develop attractive structures for institutional investors and other risk capital providers to partner with the Accelerant Risk Exchange and support our growing Member base.”

“We have been impressed by Accelerant’s underwriting capabilities, deep MGA network, and differentiated approach to aligning risk and capital. We are excited to be partnering with the Accelerant Risk Exchange through WoodStar,” added Dan Knipe, CIO of Kilter Finance.

“This innovative solution is another demonstration of Kilter’s insurance sector expertise,” Charles Lens, Managing Director of Kilter Finance further stated.

“We are excited to support WoodStar, a structure designed for long-term, capital-efficient growth,” explained Bharath Subramanian, Managing Director at Blue Owl Capital. “We look forward to providing capital to meet the risk management needs of a diversified group of small and medium sized US businesses together with the Accelerant Risk Exchange.”

WoodStar is expected to begin underwriting direct business via the Accelerant Risk Exchange in 2027.