Markel is to set up a new retrocessional insurance-linked securities platform in Bermuda.

The American insurance company added that island-based unit Markel Catco Investment Management will stop accepting new investments and the funds it oversees will be wound down over the next three years.

The new operation intends to target 2020 renewal business.

Markel Global Reinsurance executives Jed Rhoads and Andrew “Barney” Barnard will lead the new operation, Markel said.

“Markel is tremendously optimistic about the future of the ILS market,” Richard Whitt, co-chief executive officer at Markel, said.

“Over time we expect this new platform to broaden Markel’s capabilities and provide institutional investors access to further opportunities in insurance risk, complementing our existing Nephila and State National operations.

“The 2020 Retro Fund is expected to provide investors with access to property catastrophe retrocession exposure via a single-entry point and platform, and we expect it will additionally present a convenient and compelling offering to both our cedants and brokers.”

The news follows a tumultuous period for Markel CatCo, which has seen the operation investigated over the recording of loss reserves by authorities in Bermuda and the US since late last year.

Markel did not say whether the winding down of Markel CatCo was connected to the investigations.

And in January, the company dismissed Tony Belisle, Markel CatCo’s chief executive officer, and Alissa Fredericks, CEO — Bermuda, over “violations by Mr Belisle and Ms Fredricks of Markel policies relating to an undisclosed personal relationship”.

The fired executives then sued Markel, with Mr Belisle claiming unpaid bonuses of $65.9 million and Ms Fredericks claiming she was owed $7.4 million.

Markel said this month that it had settled one of the cases and was in binding arbitration to resolve the other.

CatCo set up as a collateralised reinsurance fund in 2010 and the company was acquired by Markel in 2015.