Two new examples of the collateralized insurer class of company have been set up in Bermuda, with Monarch Point Re (ISAC) Ltd. and Monarch Point Re (ISA 2023) Ltd. both registered by the regulator in May.
The pair of collateralized insurer entities appear to have a possible link to specialty insurance and reinsurance company AXIS Capital, given some of the names linked to filings seen by Artemis.
However, we reached out to AXIS Capital and the company declined to comment.
Monarch Point Re (ISAC) Ltd. is an Incorporated Segregated Accounts Company, meaning it has the ability to issue preference shares and suggests it could house numerous transactions within different cells.
We don’t have as much information on Monarch Point Re (ISA 2023) Ltd., but it seems likely to be structured for similar uses.
Given the registration of this pair of structures with a Bermuda Monetary Authority (BMA) license as a collateralized insurer, they will be able to enter into multiple collateralized insurance or reinsurance transactions, so could provide a multi-use platform for entering into risk transfer arrangements, potentially backed by third-party investors.
Monarch Point Re (ISAC) Ltd. has two directors that suggest a possible link to AXIS Capital, one being Loic Granchamp, a senior leader within the AXIS Capital insurance-linked securities (ILS) unit, AXIS ILS, who is Head of ILS Asset / Liability Strategies.
Granchamp is also Vice-Chairman of the Board of AXIS’ total-return like reinsurer Harrington Re, which was established as a joint-venture between AXIS and asset management giant Blackstone.
Harrington Re is focused on longer-tailed classes of business. As AXIS has exited property catastrophe risks and since re-focused its ILS market activities on casualty and specialty classes, it seems possible the Monarch Point Re collateralized insurers could be linked to this part of the business, if the link to AXIS proves accurate.
The other director with an AXIS link is Ben Rubin, formerly the Global Head of Risk Funding at AXIS Capital, but since 2021 a Managing Director at private equity specialist Stone Point Capital.
Rubin’s listing as a director could be a legacy from his former role at AXIS. Of course, the name of the new collateralized insurers, being Monarch Point, could potentially hint at something more current as well.
Whether there is AXIS involvement or not, it’s good to see two more of the collateralized insurer class of company being established in Bermuda, as use of the structure continues to expand.
Bermuda’s regulator, the Bermuda Monetary Authority (BMA), developed the collateralized insurance and reinsurance class of Limited Purpose Insurer (LPI) in response to the increasing sophistication and scope of the insurance-linked securities (ILS) market.
It offers a structure that can be used for multi-transactional purposes, underwriting collateralized reinsurance, retrocession and other forms of ILS transaction, while dealing with numerous sources of capital, given the ability to segregate cells or transactions from each other.
Collateralised insurers can provide a great deal of flexibility to their sponsors, by being able to face-off to multiple types of counterparties as well.
This provides a wider scope for the range of cedents and types of transactions that an ILS structure can enter into, than is possible with the more common, but more limited in use-case, special purpose insurer (SPI) vehicles.