Longtail Re is growing fast and delivering attractive returns on its portfolio of casualty and longer-tailed underwriting, Artemis is reporting.

The Bermudian-based casualty reinsurer operated by asset manager Stone Ridge Asset Management has delivered a 20 per cent annualised return-on-equity since it began in 2020, together with an asset portfolio of more than $6 billion.

In his latest letter to investors, Stone Ridge CEO Ross Stevens, said the company with a quota share focus has expanded into legacy transactions in 2025, underwriting three legacy trades out of the 100 trade requests it has seen.

Artemis has reported: “Stone Ridge, the New York based alternative risk premia focused investment management group, executed on a $1.2 billion adverse development reinsurance cover for global (insurer and) reinsurer Everest Group via Longtail Re.

“Stone Ridge utilises private capital alongside its underwriting and investment acumen to provide large-scale solutions to the casualty and longer-tailed insurance and reinsurance market through Longtail Re.

Mr Stevens explained that legacy is only a selective focus so for Longtail Re. He forewarned against investing in legacy-only reinsurers.

He wrote to investors: “Confirmation bias dooms the business model and, along the way, guillotine-level adverse selection hangs over every trade. When a one-off risk-transfer price is highly attractive for clear and imperative strategic reasons, hyper-selective, non-legacy-only investors can profitably escape with their heads, but at Stone Ridge we know half-priced sushi does not mean it’s a bargain.

“A decade ago, there were about a dozen dedicated legacy firms and funds. Today, one large player remains, though recently its credibility detonated after initiating litigation against a client. The other remaining legacy-only firms are subscale or regionally focused. Enter Longtail Re.”

First and foremost, Longtail Re has been designed to “partner, not compete with the world’s best underwriters to generate a portfolio of hyper-diversified casualty liabilities that deliver low-cost float,” Stevens explained.

Secondly, Longtail Re is designed to “invest that float in proprietary and valuable Stone Ridge-generated fixed income assets with superior risk-adjusted expected return.”

Longtail Re has ended 2025 with more than $6 billion in assets, of which around one-third are from legacy deals.