AIG

Even before RenaissanceRe had acquired Validus from AIG, the Bermuda based reinsurer has said that “substantially all” of the AlphaCat Managers insurance-linked fund strategies were subject to redemption requests from the third-party investors backing them.

RenaissanceRe, the Bermuda based reinsurance and third-party capital management specialist, has now completed its acquisition of the Validus reinsurance business from AIG, including the insurance-linked securities (ILS) unit AlphaCat.

RenaissanceRe’s acquisition of the treaty reinsurance operations of AIG, which include Validus Re, the Talbot reinsurance book, and the AlphaCat Managers ILS fund management unit, has been approved under EU Merger Regulation by the European Commission.

Global insurance giant AIG is set to invest up to $500 million into third-party capital and joint-venture vehicles run by RenaissanceRe’s Capital Partners unit, as part of the arrangement that sees the company selling the Validus reinsurance and AlphaCat ILS arms to RenaissanceRe.

RenaissanceRe is intending to leverage its third-party reinsurance capital and insurance-linked securities (ILS) operations to extract greater efficiencies out of the Validus Re reinsurance book, as it assumes it after the recently announced acquisition, with more investor capital set to be raised to support these efforts.

As part of the recently announced arrangement that will see RenaissanceRe acquiring AIG’s Validus reinsurance units and its AlphaCat Managers ILS operation, AIG has also taken an option to make what is termed a “substantial” investment into two of the RenaissanceRe Capital Partners vehicles.

RenaissanceRe, the Bermuda based reinsurer and third-party capital manager, is seeking further scale in all its endeavours, with the acquisition of the Validus reinsurance business and Talbot reinsurance book from global player AIG, while the deal includes buying the AlphaCat Managers ILS fund management unit as well.

Peter Zaffino, the CEO of insurance giant AIG, sees the current hardening reinsurance market environment as a “solid growth opportunity” for the firm’s Bermuda-headquartered reinsurer Validus Re.

American International Group (AIG) has continued to evolve its reinsurance business, both on an outwards and inwards basis, as the insurance giant secured new reinsurance protection at the middle of the year, while its ILS specialist unit AlphaCat has helped it lower its exposure to Florida property catastrophe risks, according to President and CEO Peter […]

Rating agency Standard & Poor’s has upgraded AIG’s reinsurance unit Validus Re to ‘A+’ from ‘A’, saying that the Validus operation is now considered “core” to AIG’s operations and adding that the access to third-party capital markets the parent gets through AlphaCat Managers is another benefit.