Bermuda based reinsurer RenaissanceRe has announced the formation and launch of a new Bermuda domiciled special purpose insurer sidecar vehicle called Upsilon Reinsurance II Ltd. The new venture has been formed to take advantage of the renewals by creating additional capacity for the worldwide aggregate retrocessional reinsurance market.
Upsilon Re II has been capitalised by RenaissanceRe and external investors to the tune of $185m. The full $185m has been deployed as fully collateralized reinsurance limit at the January renewals.
RenRe said that Upsilon Re II may be expanded should market conditions be conducive. Upsilon Re II may raise additional funds to provide additional fully collateralized reinsurance capacity if the opportunities to deploy the limit exist.
Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., commented; “We are pleased to announce the formation of Upsilon Re II to serve our retrocessional clients worldwide and continue our track record of providing our clients with appropriate capital. Through this endeavor, we are able to both serve our clients’ needs and design a facility that allows investors to efficiently participate in the retrocessional reinsurance market.”
Upsilon Re II is managed by Renaissance Underwriting Managers, Ltd.
New sidecars and new ventures always launch around the various reinsurance renewal seasons, hoping to take advantage of opportunities to deploy collateralized capacity. Other news towards the end of 2012 about sidecars included, Lancashire with the launch of Saltire Re I and Alterra increasing the capitalisation of New Point V.
Sidecars and fully collateralized joint-venture reinsurance vehicles are playing an increasingly important role in the reinsurance renewals, making capacity available for peak risks and allowing investors another route to invest in catastrophe and reinsurance risks.