Cayman Islands-based Northern Reinsurance has announced its launch as a new collateralized reinsurance company, with an initial capitalisation of $25 million provided by a private investment group.
This tranche of capital comes as the first of a multi-phase process through which Northern plans facilitate its growth, which will focus on helping third-party capital to participate in the insurance-linked securities (ILS) market.
“Diversification into alternatives is an important part of any family office or institutional strategy,” said Co-Founder Peter McKelvy. “In the past five years, the evolution of the traditional reinsurance market and standardization around casualty ILS has created an opportunity for private capital to generate returns superior to other low-beta assets on a risk-adjusted basis.”
The core focus of Northern Re will be on high-frequency, low-severity risks, with targeted lines of business including personal and commercial auto, general liability, workers compensation, and other professional lines.
The primary scope of opportunities will be in the regional carrier and MGA/MGU markets.
“We have worked with many of the major fronting companies in the US during our development in order to create a structure that provides exceptional collateral and additional layers of financial security,” said Co-Founder Anthony McKelvy.
“Our team has a wealth of experience both in the industry and across verticals. We are excited to already be supporting several great partners throughout the market in Q1 and look forward to future trading relationships with historically strong companies”.
Northern Re is a segregated portfolio company and operates under a B(iii) license granted by the Cayman Islands Monetary Authority.
The company was founded by brothers Anthony McKelvy, formerly of Willis Re, Guy Carpenter, and Boost Insurance, and Peter McKelvy, of the Park Agency family office, and formerly of Uber and Boost Insurance.
