The Class of 2020
New capital and startups forge ahead
Bermuda has seen a significant influx of new capital, much of it backing a group of new startups that is arguably the strongest collection of re/insurance formations for a generation. A number of more established Bermudian players also saw an opportunity to raise new capital. Bermuda:Re+ILS took a snapshot of the Class of 2020.
Arcadian Risk
Arcadian Risk received Bermuda Monetary Authority regulatory approval in August 2020 and officially began underwriting in October 2020, hitting the ground running, with tens of millions of dollars of business written in Q4 2020 and in 2021.
It writes on the paper of Third Point Re and is budgeting premium volume in the range of $75 million and $125 million in 2021. In excess casualty it is looking at areas its underwriting teams have experience in, such as life sciences, healthcare, transportation, utilities and construction.
Arcadian is targeting professional liability classes including public D&O, private companies D&O, E&O for accountants, consultants, brokers, and EPLI as well as architects and engineers (A&E) professional liability.
Chaucer
Chaucer established its Bermuda platform at the end of 2020, operating as a class 4 re/insurer, writing a range of US property, casualty and specialty reinsurance business for Chaucer Insurance Company, which launched in Dublin in 2017.
For year one it is mainly targeting US property and casualty treaty with some ancillary specialty reinsurance capacity available, but it hopes to grow its product offering and lead more North American reinsurance business over coming years.
Conduit Re
Conduit Re was capitalised on December 7, 2020 when its holding company, Conduit Holdings, completed an initial public offering on the London Stock Exchange, raising approximately $1.1 billion.
It is looking to achieve steady, sustainable growth with a well-diversified excess of loss and quota share book of treaty reinsurance business across multiple underwriting classes and in multiple territories.
Its book will be fairly evenly split between property, casualty and specialty.
Helix Global
Helix Global was incorporated in December 2018, with work having started on its formation earlier that year. It started writing business in January 2020 when it officially launched its enterprise, which is intended to be an improvement on the managing general agent model.
Its principal objective is to build distribution channels that allow for the creation of superior portfolios tailored to its partners’ specific needs.
It plans to build the business in property, casualty and financial lines, before setting up its own rated carrier in late 2021.
Mosaic
Mosaic officially launched on February 4, 2021 with $185 million in capital. The business combines syndicated capacity from its Lloyd’s balance sheet and a global distribution structure.
It writes on behalf of its own Syndicate 1609 as well as for other capital partners through its global underwriting hubs in the UK, US, Bermuda and Asia.
Mosaic believes the fusion of syndicate and agency models represents a powerful way to manage the most complex risks.
Its lines include political risk, political violence, transactional liability, cyber, financial and professional lines, and environmental cover.
SiriusPoint
SiriusPoint is a new Bermuda-based re/insurer that was born from a tie-up of two well-known institutions, Sirius International and Third Point Re. It was formed in February 2021 with over $3 billion in capital, writing a worldwide portfolio.
It is focused on growing profitable areas within specialty, casualty and accident and health. Property reinsurance, catastrophe in particular, will remain an important part of the portfolio, while other lines are grown to provide balance.
Vantage Group
Vantage Group was incorporated in July 2020 and capitalised with just over $1 billion of equity in November 2020. Its wholly-owned Bermuda operating subsidiary, Vantage Risk, was registered as a class 4 insurer in October 2020 and capitalised with $700 million from the group.
It provides property catastrophe reinsurance, covering predominantly North America, Europe, Japan and Australia, as well as specialty reinsurance across property and casualty classes. These include marine, energy, aviation, crop, workers’ compensation, property per-risk and mortgage.
It also has ambitions in the insurance-linked securities space, having launched a collateralised insurer, AdVantage Retro I, in December 2020, to address peak catastrophe risk opportunities. It intends to launch insurance products in the Bermuda and North American markets by mid-2021, with the insurance business focusing on longer tail lines, such as excess casualty, professional lines, healthcare liability and political risk.
Established players join the class
A number of other, longer-established Bermuda-based re/insurance institutions also seized the opportunity to raise additional capital in 2020.
Arch Capital Group
In June 2020, Arch Capital Group issued $1 billion of 30-year senior unsecured notes, tapping the long-term debt markets to take advantage of rates that were at historically low levels, reasoning that the capital would give it greater flexibility to respond to evolving market conditions.
It also purchased a 29.5 percent interest in a France-based insurer, Coface, for an aggregate €453 million, and announced plans to increase its investment in Watford Holdings.
Ariel Re
Ariel Re is another well-known name in Bermuda. It was bought by new owners from Argo Group in November 2020, while also entering into an operational partnership with Apollo Syndicate Management to further develop SPA 6133, a Lloyd’s special purpose arrangement focused on property catastrophe reinsurance, and Syndicate 1910.
Its risk-bearing capital is fully deployed in its two Lloyd’s syndicates and it is in the process of optimising its existing portfolios to ensure it has the highest quality books possible.
Ark Insurance
Ark Insurance describes itself not as a startup but a scale-up. It launched in 2007 as a Lloyd's-based syndicate and managing agency, managing the underwriting of Syndicate 4020 and from 2017 Syndicate 3902.
Part of the original architecture included a Bermuda-based class 3-licensed insurer called Group Ark Insurance Limited that underwrote one insurance contact being a capital quota share of the syndicates business.
In October 2020 it entered into a definitive agreement with White Mountains which made a significant cash injection into the company, while Ark converted its existing Bermuda reinsurance entity into a class 4 insurer.
It derives its business from US, European and global markets, writing excess general liability insurance and property, marine, energy, composite and specialty reinsurance.
Convex Group
Convex Group is a relatively young institution in Bermuda but, having launched in April 2019 with $1.7 billion of equity capital, it is already longer in the tooth than a number of other re/insurers that have launched in the last 18 months.
It received commitments for an additional $1.5 billion of equity and preferred equity capital by the end of 2020, bringing the total capital raised to just over $3.2 billion.
Convex aspires to build a world-class specialty re/insurer that can take advantage of its lack of legacy infrastructure to deliver the most sophisticated solutions possible.
Fidelis Insurance
Fidelis Insurance raised $1.3 billion of capital in 2020, including $860 million of common equity, $330 million of tier three debt and $125 million of tier two debt.
It grew its business from $811 million of premium in 2019 to over $1.5 billion in 2020, across its reinsurance and specialty pillars, with the marine, aviation and direct and facultative markets in particular benefiting from the strong rate increases over 2020.
RenaissanceRe
In June 2020 RenaissanceRe raised $1.1 billion in common equity through a public offering and a concurrent private placement, a capital raise its chief executive officer described as “exclusively offensive”.
It has pursued organic growth, engaging its customers early in the renewal cycle to better understand their needs, as well as taking the decision to retain more risk.
It increased its ownership in DaVinci and Medici and has $1 billion co-invested in various joint ventures. RenaissanceRe says it will grow net written premiums in 2021 by about $1 billion, while also increasing profitability.
Click here for the full report about Bermuda's Class of 2020 and new capital.
