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Original Risk: A Society for Change Agents

TransRe, Markel, others register sidecars, SPI’s in Bermuda in December


Registrations of new insurance and reinsurance vehicles in Bermuda in December 2014 demonstrated a continued focus on ILS and collateralized reinsurance vehicles on the island and brought some more recognisable sidecar names to market.

According to the Bermuda Monetary Authority (BMA) 18 new registrations were confirmed in December, with 7 of these being newly registered special purpose insurers (SPI’s), many recognisable from the names as new vehicles for collateralized market players or new sidecar vehicles for reinsurance firms, including TransRe and Markel.

The 7 new SPI’s registered in December were, along with explanations of who is behind them and links where appropriate:

Eden Re II Ltd. – A currently $290m collateralized reinsurance sidecar from Munich Re.

Blue Water Re II Ltd. – A new vehicle from insurance linked investment manager Blue Capital Management, a division of Montpelier Re. We’re unsure exactly what this is, whether a new sidecar or just another reinsurance vehicle for the manager to leverage to channel risk to its various funds and mandates.

Versutus Ltd. – Brit plc’s recently launched $75m fully collateralized reinsurance sidecar

Pangaea Reinsurance Ltd. – The latest vehicle to be registered for Transatlantic Re. The firm has previously registered a number of reinsurance sidecars using the Panagea naming convention.

Eden Re I Ltd. – Another $75m reinsurance sidecar vehicle from Munich Re.

New Ocean Capital Reinsurance Ltd. – An SPI that can only have been registered for New Ocean Capital Management, the third-party capital and ILS management unit of re/insurer XL Group and investor Stone Point Capital.

New Point Re VII Ltd. – A new reinsurance sidecar vehicle launched for Markel Corporation, judging by the naming convention.

As well as the new SPI’s, there were some other vehicles of interest to the ILS market registered in December. These include an agent named Convergence Risk Services Ltd., which is clearly targeting the reinsurance convergence and ILS space due to its name.

Also registered was a Class 3A insurer named Crabel Re Ltd., which is the reinsurance vehicle registered by Los Angeles based asset manager Crabel Capital Management LLC, which joined the Multi-Strat Re platform last year.

In total in December there were three agent registrations, two managers, three Class 1 insurers, one Class 3, one Class 3A, one Class E and the seven SPI’s registered in Bermuda.

It’s encouraging to see TransRe, the reinsurer arm of Alleghany Corporation owned insurance and reinsurance group Transatlantic Holdings, continuing to utilise third-party capital as part of its strategy, with the registration of Pangaea Reinsurance Ltd. The firm has owned a number of Pangaea reinsurance sidecars over the years, always with little in the way of fanfare, but demonstrating a commitment to this space and to building relationships with third-party investors.

Similarly Markel Corporation, with its latest New Point reinsurance sidecar vehicles, demonstrating that it continues to leverage the legacy it picked up when acquiring Alterra, which had launched a number of New Point sidecars before the M&A deal in 2013. Markel has been steadily building out capabilities in the third-party capital management and retrocession arena and clearly they are being put to work in this latest vehicle, New Point Re VII.

Some of the other vehicles will likely be used by ILS managers to offer investors access to risks using a cell type structure within the SPI’s, rather than as a single sidecar vehicle. Others may simply be performing a reinsurer role to then channel risks into funds and other structures.

The December registrations show that Bermuda, while experiencing fewer SPI registrations across the whole of 2014, remains the leading hub for any insurer, reinsurer or ILS manager looking to register and domicile its vehicles.

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