QBE Re sponsors $550m+ George Street Re casualty sidecar with Culpeper & Calidris support

QBE Re, the international reinsurance arm of the global insurance group, has sponsored its first casualty reinsurance sidecar vehicle, securing over $550 million in fully collateralised quota share reinsurance through George Street Re, with the transaction backed by institutional investors Culpeper Capital Partners and Calidris Investment Partners.

QBE Re is the latest major global player to debut a casualty reinsurance sidecar vehicle, adding to what is now a fast-growing segment of the insurance-linked securities market.

It’s also notable that this seems to be the first sidecar for the QBE Group as well, as the company said George Street Re “marks QBE’s entry into the sidecar market.”

These casualty sidecar deals reflect a desire for aligned reinsurance partnerships with economics that work for all parties and with casualty particularly complex in nature, these sidecar deals are often relatively bespoke or tailored in structuring terms, take time, diligence and expertise on behalf of all parties involved.

Under the George Street Re sidecar, QBE Re has secured efficient reinsurance capital from third-party investors to back its global casualty reinsurance portfolio.

The company explained that this arrangement enhances its “capital flexibility and providing additional capacity for QBE Re’s core cedants.”

The George Street Re sidecar has been backed by institutional investors Culpeper Capital Partners, an experienced specialist in the insurance and reinsurance space that structures deals and deploys capital on behalf of its own book and large institutional investors, as well as Calidris Investment Partners, the firm launched last year by former Ontario Teachers’ insurance-linked securities (ILS) specialist Philippe Trahan and former Blackstone insurance transaction specialist Daniel Miller.

GC Securities acted as the sole structuring agent and placement agent for the sidecar transaction, while Mayer Brown LLP served as deal counsel.

The casualty business has been reinsured through a number of cells of Mangrove Risk Solutions Bermuda Ltd., a Bermuda-based Class 3 insurance company used by Marsh Management for captive and ILS type arrangements for clients.

We understand that global specialty reinsurer Compre is involved in the transaction to provide exit optionality and liquidity for investors, presumably through some sort of arrangement that will commute or take on the risk after a defined period.

Compre has also participated in a defined portion of the sidecar, which the company said reflects “its expanding appetite for low-volatility, long-tailed underwriting lines and its continued commitment to innovative capital solutions across the reinsurance value chain.”

Compre also said that its involvement, “supports a structure that offers forward exit mechanisms for other capital providers, reinforcing Compre’s ability to partner with sponsors and investors seeking both flexibility and certainty over capital duration.”

That makes Compre the newest entrant to this important service offering, of providing liquidity and finality solutions to investors backing longer-tailed sidecar or ILS arrangements.

Chris Killourhy QBE Group Chief Financial Officer, commented on the debut casualty sidecar for QBE Re “We are excited to announce the successful completion of our inaugural casualty sidecar, George Street Re. The transaction leverages our Bermuda platform, QBE Capital, and is designed to be adaptive to our business needs while building new long-term partnerships with alternative capital providers.”

Nick Hankin QBE Re Managing Director, added, “Thanks to the support of our new partners, we will be able to meet a continued growth in demand from our cedants whilst maintaining an optimal net portfolio and diversifying our sources of capital.”

Quentin Perrot, GC Securities, Managing Director, further commented, “We are delighted to have assisted QBE Re in their first casualty sidecar transaction. The quality of the QBE Re portfolio allowed us to engage positively with leading insurance investors that had the experience and sophistication necessary to negotiate a successful transaction for all parties.”

Rachel Bardon, Chief Underwriting Officer of Compre also said, “George Street Re represents a high-quality application of third-party capital to global casualty reinsurance. Our participation reflects Compre’s growing appetite for low-volatility, long-tailed underwriting lines and our ability to support structures that balance long-term risk transfer with forward exit flexibility for capital providers.”

As we reported earlier this week, according to data from Aon the casualty reinsurance sidecar segment has now reached $1.7 billion in size, in capital deployed terms.

Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.