Bermudian reinsurer RenaissanceRe (RenRe) has announced the creation of a new property catastrophe reinsurance vehicle, called Vermeer Reinsurance Ltd., which it is launching in collaboration with Dutch pension fund manager PGGM.
RenRe said that the launch of Vermeer will allow it to provide capacity focused on risk remote layers in the U.S property catastrophe market.
The new reinsurer will initially be capitalised with $600 million of equity from PGGM, which will be the sole investor in Vermeer, with up to a further $400 million available to pursue growth opportunities in 2019.
PGGM, which has roughly €215 billion of assets under management, has been investing in re/insurance for the past 13 years and is currently one of the largest end-investors in the insurance-linked securities (ILS) asset class.
The companies added that Vermeer has already received an ‘A’ financial strength rating from A.M. Best and has obtained approval in principle to be licensed and regulated by the Bermuda Monetary Authority as a Class 3B reinsurer.
Vermeer will be managed by Renaissance Underwriting Managers, Ltd. and is expected to be consolidated into RenRe’s financial statements.
“We are proud to partner with a respected global leader in PGGM to create Vermeer,” said Aditya Dutt, President of Renaissance Underwriting Managers. “This continues RenaissanceRe’s 20-year track record of creating and managing joint ventures that match well-underwritten portfolios of risk to diverse sources of capital.”
“We continue to be a pioneer in this area and are pleased to bring our excellent service and deep expertise in underwriting, modeling and claims to address the risk challenges of our clients,” Dutt continued.
Eveline Takken-Somers, Senior Director, Credit and Insurance Linked Investments at PGGM, also commented: “Since 2014, we have focused on building strategic partnerships with top tier reinsurance companies to improve access to and selection of risk. We seek efficient implementation of our investments as we believe this leads to superior returns.
“RenaissanceRe is a world leader in both reinsurance and the creation of joint venture vehicles and we look forward to the opportunities Vermeer will provide as PGGM continues to grow its insurance portfolio.”