Best's Review


New Reinsurers Enter the Market Amid a Rise in Innovation, Abundant Capital and a Market-Changing Pandemic

Startups have found a home in well-established reinsurance hubs as well as emerging locales.
  • Lori Chordas
  • August 2021

Key Points

  • New Addition: Over the past several months, there has been a rise in the number of reinsurers created across the globe.
  • Much in Common: Many of those new companies are focusing on specialty coverages and also are operating as primary insurers.
  • The Road Ahead: While companies and investors will continue to make a home in the market, some industry experts expect the trend to create new reinsurance operations to slow down a bit in the coming months.

A number of new reinsurers have been launched in various parts of the world over the last year, helped by hardening market conditions and an influx of new capital.

They range from a company controlled by a global technology provider of games and social networking to startups in emerging countries looking to improve the region's access to reinsurance. They're among a growing list of players putting down digital roots in the reinsurance sector.

They're taking advantage of a greater use of innovation and technology, and many are focused on specialty lines and operate also as primary insurers.

Some of the new entrants include FuSure Reinsurance, Nectaris Re and SiriusPoint Ltd. Africa Specialty Risks, a managing general agent sourcing capacity for African insurance and reinsurance risks, also was launched last year.

Bermuda-based reinsurance company Canopius Reinsurance, meanwhile, was granted a Class 4 Reinsurer license earlier this year by the Bermuda Monetary Authority. Canopius said the reclassification will significantly extend Canopius Re's scope, enabling it to increase gross written premiums and write more third-party risks. The reinsurer will initially be focused on third-party property/casualty business, reflecting the opportunities created by the improving rate environment. Canopius Re currently has a Best's Financial Strength Rating of A- (Excellent).

Other new reinsurers such as Conduit Re and Vantage Risk also were started in late 2020. Conduit raised about $1.10 billion in an initial offering on the London Stock Exchange in December and the company booked about $160 million in gross written premiums during the January renewal season. The company has a Best's Financial Strength Rating of A- (Excellent).

Industry veterans Dinos Iordanou, the former CEO of Arch Capital Group, and former Axa XL CEO Greg Hendrick last year formed Vantage Risk, a Bermuda-based private equity-backed insurer and reinsurer. Vantage's rated entity, Vantage Risk Ltd., has a current Best's Financial Strength Rating of A- (Excellent). Private equity firms Carlyle Group and Hellman & Friedman, together with management, invested $1 billion of equity capital in Vantage, with the potential to increase their investment as growth opportunities arise, the company said at the time.

Some of the new startups are being led by seasoned management teams “who are happy to be coming into the sector with fresh balance sheets and no legacy issues to contend with,” said Guy Carpenter Global Chairman David Priebe.

London-based specialty (re)insurer Convex Group Ltd. was formed in 2019 with $1.7 billion of committed capital and run by Stephen Catlin, the founder and former CEO of Catlin Group, which was later acquired by XL Group. Convex in November said it had commitments for an additional $1 billion of capital. Underwriting entities of Convex Group currently have a Best's Financial Strength Rating of A- (Excellent).

Over the past 18 months, the market-changing pandemic has brought new attention to reinsurance, “driving the perception of risk and availability of capital on its head and creating an opportunity for new companies to be formed,” Priebe said.

Carlos Wong-Fupuy, a senior director of global reinsurance ratings at AM Best, said the companies' recent foray into reinsurance comes as a bit of a surprise “given that insurance-linked securities have given third-party capital an efficient way to move in and out of the sector.”

But that capital has typically focused on widely modeled property catastrophe exposures, he said, “and the opportunities presented by the current hardening market reach into much broader exposures, with U.S. casualty being an obvious example.”

In the coming months, Priebe expects the rise of reinsurance startups to continue, albeit at a much slower pace. “We're now seeing that level of activity starting to level off a bit, and companies now considering entering the market will likely do so in very niche areas,” he said.

However, a greater focus on advanced technologies and data analytics and the continued flow of capital into the industry, Priebe said, will bring about many opportunities in reinsurance and open the door for companies and investors who may one day seek a home in the sector.

Priebe said they will create what he calls “a new breed of reinsurers” that will leverage new technologies to deliver more innovation and better risk selection at a lower cost.

Best's Review took a closer look at four startups that recently stepped into the market.

David Priebe Guy Carpenter

The market-changing pandemic has brought new attention to reinsurance, “driving the perception of risk and availability of capital on its head and creating an opportunity for new companies to be formed.”

David Priebe
Guy Carpenter

Africa Specialty Risks

Africa Specialty Risks was launched last year by Africa-focused private investment firm Helios Investment Partners in partnership with Mikir Shah, former CEO of Axa Africa Specialty Risks, and Bryan Howett, former CEO of Old Mutual's pan-African reinsurance operations. Earlier this year, Africa Specialty Risks launched a fully capitalized and licensed reinsurer in Mauritius to meet the needs of the African continent.

Souleymane Ba, a partner at Helios, noted that there's been a sustained lack of adequate insurance capacity across Africa, which was further exacerbated by COVID-19 as global reinsurance providers focused on their home markets. “ASR has been established to address this gap by providing specialist risk mitigation products which companies and capital providers operating in Africa have found difficult to access to date,” he said in a statement on the launch of ASR.

Africa Specialty Risks offers property, construction, political risk, trade credit, energy, liability, PVT (political violence and terrorism) and parametric reinsurance solutions.

Ba said the reinsurance startup has secured a multiyear binder capacity of up to $25 million per risk through a partnership with India's GIC Re and annual capacity from Hong Kong-based Peak Re. That was supported and completed with the help of Aon.

In addition to its operation in Mauritius, which Ba said is quickly evolving into a well-established financial services and investments hub in Africa, Africa Specialty Risks plans to create business development hubs in six other nations across the continent, including Morocco, Kenya, South Africa, Ivory Coast, Egypt and Nigeria.

Substantial natural resources, a young and growing population and the gradual development of regulatory regimes are expected to drive continued growth potential in sub-Saharan reinsurance markets, according to a 2020 Best's Market Segment Report, Tough Operating Conditions Present Challenges for Sub-Saharan Reinsurance Markets.

FuSure Reinsurance Co. Ltd.

FuSure Reinsurance Co. Ltd., a joint venture controlled by Chinese tech giant Tencent, is a startup licensed as a general professional reinsurer and headquartered in Hong Kong. The company, with an initial capitalization of about $129 million ($1 billion HKD), is 85.01% owned by Tencent and 14.99% owned by Grand Azure Ltd., a privately owned investment company, according to AM Best.

AM Best assigned FuSure a Best's Financial Strength Rating of A- (Excellent) in June, saying it assesses FuSure's balance sheet as very strong. It said the AM Best rating also reflects the implicit and explicit support from its parent, Tencent.

Tencent is a global technology provider of games, social networking, music, web portals, fintech and e-commerce solutions. Tencent also has an insurance platform through WeSure Insurance Ltd., which the company said has a user base of over 55 million and has insured more than 25 million users.

Since its launch, FuSure has been largely focused on health reinsurance in Greater China; however, according to AM Best, it plans to eventually diversify into other lines and geographies.

AM Best said FuSure expects to build its market presence by sourcing most of its premium revenue through Tencent's established insurance client network. FuSure said it aims to bring the technology and innovation expertise of its parent company to Hong Kong and global insurers, which AM Best expects could lead to competitive advantages for the company in product design and pricing sophistication.

In recent years, technology conglomerates like Tencent have started owning large tracts of the insurance risk-to-capital market chain, “as they have origination nailed through their broad customer relationships and technology,” according to an article by Artemis.

Artemis said now that much of the chain is completed and owned with reinsurance capital access secured through FuSure, it will allow Tencent to “innovate far more rapidly, secure in the knowledge that it has access to reinsurance capital and that this can be efficiently deployed as needed to support Tencent's growing interests in the insurance space.”

Nectaris Re

Horseshoe Re received regulatory approval in principle in September 2020 from the Bermuda Monetary Authority to establish Nectaris Re, a Class 3A reinsurer.

Nectaris Re, domiciled in Bermuda, was assigned a Best's Financial Strength Rating of A (Excellent) earlier this year.

According to AM Best, the company's business strategy is to retrocede all of its business to Horseshoe Re II Ltd. segregated accounts company with cells that are funded by insurance-linked securities funds managed by Leadenhall Capital Partners, a subsidiary of Mitsui Sumitomo Insurance Co.

The startup writes predominantly property catastrophe reinsurance contracts and some casualty and marine risk. Its pricing strategy is to focus on underwriting profits, not on asset returns, according to AM Best.

ILS managers have, in recent years, expanded their underwriting infrastructure, with some opting to move beyond using fronting or transformer service providers by owning or backing independent reinsurance platforms, according to Artemis. Leadenhall, however, has been using its partner MS Amlin to provide a rated front for many of its transactions, Artemis said.

Artemis said it expects Nectaris Re to provide Leadenhall greater options and a more efficient way to manage capital and collateral on behalf of its investors and counterparts.

SiriusPoint Ltd.

With more than $3 billion of initial capital in hand, Bermuda-based global reinsurer and insurer SiriusPoint Ltd. was launched in February following the merger of specialty reinsurer Third Point Reinsurance and Sirius International Insurance Group Ltd., a global multi-line insurer and reinsurer, in a cash-and-stock deal valued at nearly $788 million.

SiriusPoint Chairman and CEO Sid Sankaran said in a statement the “strategic union of the two highly complementary organizations” is an opportunity to leverage the companies' combined strengths and “refocus our organization on profitability, innovative partnerships and solutions.”

Prior to the merger, Third Point owned two insurance subsidiaries—Third Point Reinsurance Co., a Class 4 Bermuda reinsurer in the market since 2012, and Third Point Reinsurance (USA) Ltd., which began writing business on the island in 2015, according to AM Best. Sirius International Insurance Group operated under three main subsidiaries—each of which has now been rebranded under SiriusPoint.

Rated operating subsidiaries of SiriusPoint Ltd. have a current Best's Financial Strength Rating of A- (Excellent).

Sankaran in a May conference call said the company still sees itself as a startup company and a member of the Class of 2020 despite having 75 years of relationships. Sankaran said the midsized specialty (re)insurer's wide-reaching global footprint, along with its “ability to be nimble and responsive,” will differentiate it from other reinsurers in the market. He also said he expects SiriusPoint to drive technology innovation and become a disruptive force in the industry. The group, Sankaran noted, is built around a global platform that provides insurance and reinsurance solutions services to clients and brokers in nearly 150 countries with access to admitted and non-admitted paper in Europe, the U.S., Bermuda and Lloyd's.

SiriusPoint writes a diverse worldwide portfolio of business including life, accident and health, property, marine and energy, casualty, aviation and space, and credit and bond. It also offers runoff solutions.

Lori Chordas is a senior associate editor. She can be reached at

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