Aspen Insurance Holdings Ltd and PIMCO Investment Management Company LLC have formed Pando Re Ltd, a Bermudian-domiciled collateralised insurer and reinsurer focused on casualty business.

Under a long-term agreement, Aspen will be the sole cedant to Pando Re and PIMCO will be the exclusive investment manager.

The company said Pando Re would participate in Aspen’s casualty insurance, global professional lines insurance, cyber insurance and casualty reinsurance business lines through a multi-year, quota share reinsurance agreement in which Aspen would receive loss coverage, pay premiums, and earn commissions. The cession incepted on January 1, 2024.

The capital to support Pando Re’s business plan is being provided by investments from a PIMCO-managed fund. Pando Re’s investment portfolio will be comprised primarily of investment-grade rated fixed-income assets managed by PIMCO.

The company said the launch of Pando Re was a continuation of Aspen’s strategy to partner with third-party investors by aligning attractive underwriting risks with the right source of capital.

It added that Pando Re benefited Aspen’s casualty insurance and reinsurance platforms through a multi-year capacity agreement, while also driving continued growth of third-party capital and fee income for Aspen Capital Markets.

Brian Tobben, the chief executive of Aspen Capital Partners, said: “We believe now is the right time to bring additional third-party capital to the casualty market and are excited to partner with PIMCO, a leading investment manager. We see a significant opportunity for this new capacity to support the needs of our clients, cedants and distribution partners against a backdrop of reduced appetite from the reinsurance market.

“We are delighted to work with PIMCO, who share a similar vision of long-term value creation through highly aligned risk management on both the asset and liability sides of the balance sheet. We look forward to working with our partners to leverage Pando Re and develop new solutions for the casualty market.”

Deutsche Bank Securities Inc acted as exclusive financial adviser to Aspen and placement agent on the transaction.