Fitch Ratings has released a report stating that Bermuda start-ups in 2020 benefited from clean balance sheets and lack of legacy issues or reserves.
Analysts believe this could be particularly valuable given the uncertainty around pandemic-related claims and rising social inflation affecting the U.S. casualty business.
With these benefits, Fitch sees Bermuda as continuing to be a desired jurisdiction for the formation of new re/insurers to quickly capitalise on favourable pricing.
Several Bermuda startup/scale-up operations provide disciplined, long-term capacity alongside a nearly equal amount of capital raised in new Lloyd’s of London syndicate start-ups.
Each of these operations have recently been launched with experienced executives and private equity investors.
Conduit Holdings, a startup class 4 Bermuda reinsurer raised $1.1 billion in a December IPO on the London Stock Exchange. The company is expected to write a broad portfolio of shorter-tail property and specialty and longer-tail specialty and casualty business, geographically diversified principally across Europe and the U.S. Conduit operates as a treaty reinsurer and does not write direct primary insurance business.
Vantage Group Holdings was established with $1 billion of capital raised, led by private equity firms The Carlyle Group and Hellman & Friedman. The start-up launched its class 4 Bermuda platform in time for January 2021 reinsurance renewals, writing property catastrophe and specialty reinsurance.
White Mountains Insurance Group contributed $605 million of equity capital to scaleup Ark Insurance Holdings Limited’s class 4 Bermuda platform, with White Mountains committed to contribute up to an additional $200 million of equity capital in 2021.
Enstar Group relaunched StarStone U.S. Holdings, as Core Specialty Insurance Holdings, with $670 million of new capital from private equity, management and other selected investors.
