W. R. Berkley Corporation, the US headquartered insurance holding company, has continued to expand the premiums ceded to investors backing its Lifson Re collateralized reinsurance sidecar vehicle during the third-quarter of 2022.
By the end of the first-half of 2022, W. R. Berkley had ceded some $226 million of premiums to the Lifson Re sidecar, taking advantage of its increased capitalisation of $250 million for the current underwriting year.
Through the third-quarter W. R. Berkley continued to capitalise on that third-party investor funding, by ceding even more premiums to the sidecar structure.
Recall, W. R. Berkley launched a Bermuda based special purpose insurer (ILS) named Lifson Re Ltd. in time for the January 2021 underwriting year, having raised $250 million in capital for the sidecar.
Lifson Re has operated as a kind of third-party capital backed property & casualty (P&C) reinsurance sidecar structure for the company, participating in its reinsurance cessions and bringing efficient capital market investor funding into W . R. Berkley’s reinsurance tower.
The insurer increased the cession ratio, from 22.5% to 30.0% effective July 1st 2022, meaning the Lifson Re sidecar is taking a greater share in any and all of W. R. Berkley’s P&C reinsurance or retrocession placements, as long as more than one open market reinsurer is participating as a counterparty to the firm.
Now, after the first nine months of the year, ended September 30th 2022, W. R. Berkley has ceded approximately $308 million of premiums to Lifson Re.
That’s a significant increase on the $182 million of written premiums ceded to Lifson Re over the first nine months of 2021.
W. R. Berkley previously revealed that the Lifson Re sidecar only has two investors backing it, both institutions with experience in the reinsurance market.
As the sidecar platform becomes increasingly useful to W. R. Berkley, it stands to reason the company may bring more capital via the sidecar and perhaps add additional investors to support Lifson Re.
Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.