It transpires that Bermudian reinsurance firm RenaissanceRe was responsible for the formation of special purpose insurer Fibonacci Reinsurance Ltd. and the subsequent issuance of $140 million of participating notes, which Artemis wrote about earlier today.
RenRe said that it has formed Fibonacci Reinsurance Ltd. (Fibonacci Re), a Bermuda domiciled Special Purpose Insurer. The company explained that Fibonacci Re was established in order to provide collateralized capacity to Renaissance Reinsurance, the main Bermuda-based reinsurance subsidiary of RenaissanceRe Holdings Ltd.
The capital behind the $140 million issuance of participating notes has been raised from third-party investors and also the reinsurers RenaissanceRe Medici Fund Ltd., an existing ILS fund that has in the past been focused on catastrophe bonds operated by RenRe.
RenaissanceRe said that by establishing Fibonacci Re and securing the collateralized reinsurance capacity, the firm can “support its clients with additional property catastrophe reinsurance capacity.” In this way the SPI acts as a sidecar vehicle for RenRe, enabling it to bring additional third-party capacity within its underwriting business.
However, while also acting as a reinsurance sidecar, the Fibonacci Re SPI perhaps also offers RenRe a way to acquire new assets for the Medici cat bond focused ILS fund as well, which makes it an attractive way to secure new risk-linked assets for that portfolio from its own underwriting book.
As we wrote earlier today the $140 million of notes issued by Fibonacci Re have been listed on the Bermuda Stock Exchange (BSX).
For more details on reinsurance sidecar transactions and investments view our list of collateralized reinsurance sidecars.