Ryan Specialty, the international insurance group, has launched a collateralized reinsurance sidecar named Ryan Alternative Capital Re, Ltd. alongside re/insurer AXIS Capital and raised approximately $400 million to fund the structure thanks to backing from investment firms Flexpoint Ford, LLC and Sixth Street.
Ryan Alternative Capital Re will provide efficient reinsurance capital on a risk-attaching basis across a multi-year term to support future growth for the delegated platform of the Ryan Specialty group.
The roughly $400 million of committed capital backing the sidecar structure comes from funds under the management of Flexpoint Ford and Sixth Street, two names well-known in the reinsurance industry and with a track-record backing sidecars and other structures.
The company expects that over the term Ryan Alternative Capital Re can provide around $900 million in multi-year premium capacity to support the Ryan Specialty Underwriting Managers business, and it has been launched through a strategic trading relationship with global re/insurer AXIS Capital, supported via its Lloyd’s of London syndicate 1686.
Miles Wuller, CEO of RSUM, commented on the new collateralized reinsurance arrangement, “We believe this sidecar’s unique scope makes it the first of its kind in the (re)insurance marketplace. RAC Re is a multi-year, multi-class P&C vehicle that provides capacity for specialty cat and non-cat property and casualty risks across our diverse, largely non-correlated portfolio of MGAs.
“This vehicle marks a significant opportunity for RSUM to accelerate solution delivery to the industry and rapidly respond to future market dislocation.
“We are excited to launch this opportunity in collaboration with AXIS and with the support of Flexpoint and Sixth Street, both exceptional insurance investors with long track records in the specialty ecosystem. AXIS has been a committed ally to the thought leadership and innovation that brought this transaction to life. Further, we appreciate Lloyd’s of London’s constructive support of AXIS, the transaction structure, and welcoming our entire syndicated portfolio to the London market.”
Daniel Draper, Group Chief Underwriting Officer of AXIS, added, “Through this collaboration, we are advancing our specialty leadership ambition while expanding our reach into highly targeted markets. We worked closely with Ryan Specialty to carefully select an attractive portfolio of specialty MGAs that fit our risk reward parameters and align with our delegated underwriting strategy and partnership criteria.
“This relationship reflects the progress AXIS had made in expanding our ability to drive profitable growth with our trading partners, delivered responsibly and sustainably, with established controls to ensure underwriting discipline and careful risk selection.”
Danny Arnett, Managing Director of RSUM Alternative Capital, further commented, “We are pleased to launch this pioneering transaction that includes cat and casualty combined in a single ILS structure. This undertaking is a testament to the strength, quality, and diversity of the RSUM platform.
“We are proud to collaborate with AXIS, Flexpoint, and Sixth Street and expect that we will be able to replicate many times over this innovative capital solution now that we have successfully proven its viability as an executable transaction.”
It’s a further example of efficient capital markets backed capacity being brought to bear to support and fund expansion of insurance underwriting businesses, with this sidecar offering both a form of aligned reinsurance protection and capital for growth.
Deutsche Bank Securities acted as the sole structuring and placement agent for this transaction, which was led by Deutsche Bank’s FIG & Insurance Solutions business.
Sidley Austin LLP and Conyers, Dill and Pearman acted as the legal counsel to Ryan Specialty in the transaction, while Mayer Brown LLP served as legal counsel to Flexpoint and Sixth Street.
Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars.
