Bermuda-based insurer and reinsurer Argo Group has set up several new vehicles to boost its capacity.

The firm has created Harambee Re to cover Island property portfolios underwritten by Bermuda-based Argo Re and Colony Speciality after setting up a similar firm last year.

Argo Group president and CEO Mark Watson said: “We are pleased to continue support of our business growth objectives through this vehicle, which is larger for 2014 than for 2013.

“Harambee Re enables us to increase our underwriting capacity for key business units without adding materially to the Argo Group’s overall exposure to volatility associated with catastrophe losses.”

The firm said that Harambee Re “underscores Argo Group’s strategy of efficiently capitalising on market opportunities and building upon the company’s previous insurance-linked securities (ILS) transactions”.

Sidecars are special financial structures set to allow investors to take on the risk and return of a group of insurance policies written by an insurer or reinsurer.

Insurers and reinsurers will only pay the premiums to investors associated with the group of insurance policies if they place sufficient funds in the sidecar to ensure it can meet claims if they arise.

The news came as Argo announced it had completed the placement of three catastrophe bonds worth $172 million on the Bermuda Stock Exchange through its Bermuda-based Loma Re Insurance arm.

The cat bonds will provide protection for its US insurance and reinsurance subsidiaries Argo Re and Lloyd’s Syndicate 1200 against US hurricanes, US and Canadian earthquakes and major storms.

The bond issue continues Argo Group’s participation in the fast-growing insurance-linked securities (ILS) market.

The firm said: “While providing reinsurance protection from the frequency of catastrophe losses, participation in the ILS market is also expected to position Argo Group to continue to capitalise on market opportunities by efficiently replacing capital otherwise needed to support the risk of frequent and sizeable events.”