RenRe unveils new $1bn property cat reinsurer

Bermuda-based RenaissanceRe Holdings and Dutch pension fund manager PGGM are launching a new property catastrophe reinsurer called Vermeer Reinsurance to provide capacity focused on risk remote layers in the US property catastrophe market.

PGGM is a Dutch pension fund service provider with €215 billion of assets under management. It has a 13-year track record of investing in insurance and is currently one of the largest end-investors in the insurance-linked securities (ILS) asset class, according to a corporate statement.

Vermeer will be initially capitalized with $600 million of equity from PGGM, with up to a further $400 million available to pursue growth opportunities in 2019, for a total of $1 billion of capital.

The company has received an “A” financial strength rating from AM Best and has obtained approval in principle to be licensed and regulated by the Bermuda Monetary Authority as a Class 3B reinsurer. Vermeer will be managed by Renaissance Underwriting Managers, and is expected to be consolidated into RenaissanceRe’s financial statements. PGGM is the sole investor in Vermeer.

“This continues RenaissanceRe’s 20-year track record of creating and managing joint ventures that match well-underwritten portfolios of risk to diverse sources of capital,” said Aditya Dutt, president of Renaissance Underwriting Managers. “We continue to be a pioneer in this area and are pleased to bring our excellent service and deep expertise in underwriting, modelling and claims to address the risk challenges of our clients.”

Eveline Takken-Somers, senior director, credit and insurance linked investments of PGGM, added: “Since 2014, we have focused on building strategic partnerships with top tier reinsurance companies to improve access to and selection of risk. We seek efficient implementation of our investments as we believe this leads to superior returns. RenaissanceRe is a world leader in both reinsurance and the creation of joint venture vehicles and we look forward to the opportunities Vermeer will provide as PGGM continues to grow its insurance portfolio.”