Northern Reinsurance SPC, a balance sheet reinsurer based in New York and Cayman, has successfully increased its committed capital by securing an additional $50m in funding.
This second tranche announced by the group has brought their total committed capital to $75m, fuelling the continued growth of Northern Re alongside the favourable market conditions.
Established earlier this year, Northern Re has already partnered with sophisticated MGAs and major fronting insurers, playing a critical role in the platform’s development. The company’s partnerships extend to mutual and regional insurance companies, crucial as they target over $100m in committed capital by 2024.
The company specialises in deploying capacity through a hybrid approach to the traditional collateral model. This involves dividing the capital stack into company surplus and risk capital.
A distinguishing factor for Northern Reinsurance lies in the presence of an onshore balance sheet, Northern Reinsurance Segregated Portfolio Holdings (“Northern Holdings”). This entity holds individual segregated portfolios of the company, providing an additional layer of financial security.
Co-founder of Northern Reinsurance Peter McKelvy commented on the capital injection, stating, “This was an important decision we made early on in our lifecycle as we continued to evaluate how we could make the process with our counterparties easier and more secure. We are extremely comfortable trading within the guidelines of a trust, according to the state statutes or Credit for Reinsurance Model Act, and determined that cash would better meet the needs of our partners.”
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