AXA XL Reinsurance in Bermuda has completed an alternative capital reinsurance transaction with Bluefire Insurance, a Texas based managing general agency (MGA).
Under the terms of the agreement, Bluefire will assume risk from its personal auto portfolio through a collateralized reinsurance agreement with AXA XL.
The transaction represents Bluefire’s first risk taking position on its business, and the first personal auto alternative capital transaction that AXA XL has completed in Bermuda.
“AXA XL Reinsurance is pleased to partner with Bluefire on this transaction,” said Paul Simons, Head of Property, Global Markets and Head of Bermuda Reinsurance at AXA XL.
“As a leading global reinsurer with experience in both the traditional and alternative capital markets, we offer customized, innovative solutions across a broad product offering,” he continued.
“While most of our alternative capital solutions have been in the property catastrophe space, this transaction demonstrates our willingness and ability to provide alternative offerings in casualty and other lines of business.”
Jamie Pooley, Head of Strategy at Bluefire Insurance, also commented: “Bluefire has a diverse and stable book of business with significant scale that is delivering consistent and predictable returns to our reinsurance partners.”
“We have been exploring ways to reinsure our own business for some time but casualty quota share reinsurance agreements have an exposure duration which presents capital efficiency challenges.”
Pooley went on: “Once we explained our intent to take risk with the team at AXA XL, we collaborated to design a bespoke structure that met both parties’ objectives. We are delighted to have expanded and further aligned our relationship with AXA XL while creating a capital efficient mechanism that captures the results we are producing.”
AXA XL were advised by Walkers Bermuda on this transaction. Bluefire were advised by Foley & Lardner LLP. Bluefire’s segregated cell ‘Bluefire ACR’ is managed by Quest Group, Bermuda and is housed inside RQIH, a Bermuda Segregated Account Company.