DaVinci Re

RenaissanceRe, the Bermuda-based reinsurance firm and third-party capital management specialist, is planning to further expand the balance-sheet of its DaVinciRe sidecar-like third-party capitalised reinsurance joint-venture through a $300 million private debt issuance.

DaVinci, the sidecar-like third-party capitalised reinsurance joint-venture vehicle operated by RenaissanceRe has received an upgrade from Moody’s, with the ratings agency citing DaVinci’s increased scale and long-term profitability as key drivers.

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.

At the key January 1st reinsurance renewal season, RenaissanceRe, the global reinsurance firm and third-party capital manager, purchased more retrocessional protection that had been anticipated, according to CEO Kevin O’Donnell.

The leadership at RenaissanceRe, the global reinsurance firm and third-party capital manager, expects fee income from the Capital Partners and related insurance-linked securities (ILS) capital management business will trend higher this year, as the unit’s scale and AuM increases.