New beginnings

Under new ownership and a new partnership with Apollo Syndicate Management, Ariel Re’s capital raise in 2020 will allow it to benefit from the momentum for change it currently sees in the market, says chief executive officer Ryan Mather.

“We plan to be highly selective in the lines of business we write.”
Ryan Mather, Ariel Re

How much capital did you raise and how?

Ariel Re was bought by new owners from Argo Group in November. At the same time Ariel Re entered into an operational partnership with Apollo Syndicate Management to further develop SPA 6133, a Lloyd’s special purpose arrangement focused on property catastrophe reinsurance.

The capital to support Syndicate 1910 is approximately $500 million and for SPA 6133 it is about $100 million. Some of this capital is provided by Ariel Re shareholders with the balance provided by third party partners.

Who are the main investors?

Our principal shareholders are JC Flowers, a private equity investment firm which specialises in the financial services industry, and Pelican Ventures, led by Jim Stanard—a founder and former chief executive officer of RenaissanceRe Holdings.

Have you hired any new key figures/senior management to deploy?

We have already made a series of key new hires. Stanard, who was also the founding chair of TigerRisk, will act as our chair. Jayant Khadilkar of Pelican Ventures joins Ariel as special adviser on risk management and technology.

I returned to Ariel Re as chief executive and Darren Lednor returns to Ariel Re to assume the position of active underwriter for Syndicate 1910. Reed Gaglio has also rejoined Ariel Re with specific responsibility for the Apollo business we now manage.

“It was also timely that we had the opportunity to acquire a high quality franchise such as Ariel Re.”

What is your initial business plan for how you will deploy the money?

Our risk-bearing capital is already fully deployed in our two Lloyd’s syndicates and we are in the process of optimising the existing portfolios. We plan to be highly selective in the lines of business we write and make sure we have the highest quality books overseen by our world-class underwriters.

Why did you feel now was a good time to raise additional capital?

Over the past few years the parts of the reinsurance market in which we participate have been highly competitive. With a series of major losses including in 2020 with COVID-19 we feel that there is momentum for change. This was borne out in observed positive rate change in all lines where we play as well as more favourable terms and conditions.

It was also timely that we had the opportunity to acquire a high quality franchise such as Ariel Re and start with a great team and a mature book of business.

Why did you choose Bermuda?

Ariel Re has been based in Bermuda since 2005 and we firmly believe it is the leading reinsurance market for our chosen lines of business. We enjoy close proximity to the US market which means we have great access to business with relatively low acquisition costs.

Not only is Bermuda a wonderful place for our staff and their families to live and for our clients to visit, it presents a favourable general business and regulatory environment.

“We particularly like the depth of talent available.”

What has been your experience of Bermuda so far?

Ariel Re has been in Bermuda for over 15 years so we are very familiar with the benefits of doing business in Bermuda and are fortunate to employ many talented Bermudians. We particularly like the depth of talent available, the industry support groups such as the Association of Bermuda Insurers and Reinsurers and the high quality advisory and consulting services that can be procured locally.

What are your predictions for reinsurance market conditions in 2021?

We saw a double-digit rate change in many lines of business at January 1 and expect a continuing hard or firming market for commercial P&C in most all parts of the world as a rational and necessary response to years of underpricing of risk and a more uncertain risk environment today.

What are your medium-term objectives?

We want to take an already well-established business and make it even better: our aim is to be the premier manager of reinsurance risk. Over time we plan to add greater scale via development of our business platforms, addition of new capital partners and increased market share in our core lines of business.

Image courtesy of Shutterstock / Protasov AN / Butterfly Hunter

In association with:

A Bermuda:Re+ILS Special Report