New platform for asset-manager reinsurers
The Horseshoe Group has formed a platform for asset manager-backed reinsurers.
It is being promoted as “a new chapter in convergence products expanding outside of the property catastrophe markets”.
And the first reinsurer has joined the new platform, which is known as Convergence Risk Services (CRS).
The Horseshoe Group subsidiary will provide ready-to-go services for asset managers who want to form a reinsurance company focused on casualty reinsurance, and want to actively manage the assets.
The group, which has offices in Bermuda, Cayman Islands, Ireland and Gibraltar, is a leading provider of insurance management services to insurers, reinsurers, sidecars, transformers, and catastrophe bonds. In a statement it said it will “leverage the existing platform, expertise and full service capabilities” it already offers clients to assist in the management of reinsurance companies.
With CRS, the company said it would create stand-alone reinsurance companies in a cost effective way, without significant start-up costs or large initial capital expenditure.
The new platform has hired Steven Musicant as chief underwriting officer. He will do the underwriting on behalf of clients. Mr Musicant previously worked for Maiden Reinsurance and Maiden Holdings, Allied World Assurance Company, and Guy Carpenter.
While Brenton Slade, Horseshoe's chief operating officer, has been appointed chief executive officer of CRS.
“We are extremely excited about the formation of CRS and our ability to leverage our existing infrastructure to provide full-service solutions in the formation of these type of reinsurers” said Andre Perez, Horseshoe Group CEO.
“We believe there will be a significant demand from small and medium sized asset managers to form cost effective reinsurers to enter the casualty market.
“Taking a page out of the ILS market book, the reinsurers on the CRS platform will fully collateralise their obligations which will make them top reinsurance security without the need of an agency rating.”
In recent years Mr Perez has said the traditional reinsurance model is dying due to the increasing use of third-party capital to support the underwriting of reinsurance risks.
Mr Slade, who was the chief marketing and capital markets officer for Flagstone Reinsurance before joining Horseshoe Group last year, said: “CRS will effectively act as a launch pad for this type of reinsurer by providing a cost effective solution to start operations without committing to significant costs until the business ramps up.
“CRS is unique in its ability to provide market facing underwriting services to clients on our platform and Steve Musicant has an excellent underwriting track record.”
He added: “We view this as the next generation in casualty underwriting and a new chapter in convergence products expanding outside of the property catastrophe markets.”
In a statement, the firm said the first asset manager-sponsored reinsurer to be launched on the CRS platform intends to combine the casualty reinsurance underwriting expertise of CRS with an actively managed investment portfolio.