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Limestone Re nears $700m of capacity placed with ILS investors: Slaughter


U.S. primary insurance giant Liberty Mutual has now tapped the capital markets for almost $700 million of collateralized reinsurance capacity through the firms Bermuda segregated accounts reinsurance sidecar vehicle, Limestone Re Ltd., according to James Slaughter.

Liberty Mutual returned to the capital markets recently with a $278 million issuance and sale to investors of notes from its Limestone Re collateralized reinsurance sidecar.

That followed up on the firm securing a $160 million source of collateralized reinsurance in the first issuance from its Limestone Capital Markets platform in December 2016.

It appears that Liberty Mutual must have entered into some private arrangements with investors in between, as well as the two series of notes we’ve seen issued through Limestone Re, as James Slaughter, Senior Vice President and Chief Underwriting Officer of Liberty Mutual’s Global Risk Solutions unit said today that the total is now close to $700 million.

“This latest transaction brings the total Limestone reinsurance collateralized capacity placed with ILS investors to nearly $700 million, demonstrating our commitment to the ILS market,” Slaughter explained.

The latest deal saw Limestone Re issuing $278 million of participating notes to investors in a private placement, with the deal providing Liberty Mutual with collateralized reinsurance for its U.S. property catastrophe program, as well as its U.S. homeowners and global property reinsurance risk.

Slaughter commented, “Reinsurance through the Limestone Re platform forms an integral component of Liberty Mutual’s long-term strategy for accessing third-party capital. Liberty Mutual is able to leverage our global distribution platform to provide, through reinsurance with the Limestone Re platform, insurance-linked securities (ILS) investors diversified pools of risk while concurrently bringing investors as close as possible to the underlying insurance risks.”

Matthew Moore, President, Liberty Specialty Markets, Liberty Mutual, said that investors were receptive the latest Limestone Re sidecar offering,  “We’re pleased with the overwhelmingly positive market reception and look to continue to broaden our partnerships with ILS investors through future transactions.”

We hope to track down the missing placement amount to add to our sidecar directory of deals, but for now we assume this was a private placement perhaps to a select club of investors, or even a single investor.

Update: A spokesperson told us that the $700 million reflects the total investor funds currently on-risk through public and private transactions undertaken by Limestone Re.

For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.

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