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RenRe Launches $185 Million Retro Vehicle

Posted on 07 Jan 2013 by Neilson

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RenReRenaissanceRe Holdings Ltd. said it's formed Upsilon Reinsurance II Ltd., a new Bermuda-domiciled special purpose insurance vehicle to write collateralized retrocessional reinsurance.

Investors including RenaissanceRe have capitalized Upsilon Re II, and $185 million of fully collateralized reinsurance limit has been deployed, the company said in a statement. Additional capital may be raised for more capacity if additional market opportunities arise, the company said.

Upsilon Re II is managed by Renaissance Underwriting Managers Ltd.

Attempts to reach the company for additional comment were not immediately successful.

In June, RenaissanceRe Holdings Ltd. launched Timicuan Reinsurance III Ltd., a $55 million Bermuda company that will reinsure the Florida homeowners market.

Renaissance Reinsurance and DaVinci Reinsurance Ltd. entered into a fully collateralized reinsurance agreement with Tim Re III, under which Renaissance Reinsurance and DaVinci would cede to Tim Re III a defined portfolio of their property catastrophe business, covering primarily hurricane risks for Florida insurers during the 2012 hurricane season, the company said.

Investors, including RenaissanceRe, capitalized Tim Re III with about $55 million of equity capital.

In 2009, RenaissanceRe launched a $60 million sidecar, Timicuan Reinsurance II Ltd., which also provided coverage for Florida hurricane risk.

About 20 sidecars carrying a combined $4.5 billion in initial capacity were launched in the wake of hurricanes Katrina, Rita and Wilma in 2006, according to A.M. Best's Review & Preview 2007. The number of sidecars has dwindled since then, although a few new ones have been born.

In March, Alterra Capital formed New Point V Ltd., a special purpose insurer, according to a filing with the U.S. Securities and Exchange Commission.

In December, Alterra Capital boosted the size of New Point V to $247 million from $210 million.

Renaissance Reinsurance Ltd. currently has a Best's Financial Strength Rating of A+ (Superior).

The stock of RenRe was trading at $80.73 a share on the afternoon of Jan. 4, up 0.25% from the previous close.