New Collateralized Reinsurance Company, Northern Re, Announces Launch with $25M in Committed Capital

Northern Reinsurance SPC, Ltd. (“Northern Re“), a Cayman Islands-based reinsurance company, announced that it launched on January 1, 2023. Northern Re is initially capitalized with $25 million from a private investment group, and will be supporting a select cohort of historically profitable portfolios well known to the managing partners. This tranche of capital comes as the first of a multi-phase process through which Northern will facilitate its growth. The company combines deep sector knowledge with a modern framework, which provides third-party capital the ability to participate in the insurance-linked securities (“ILS”) alternative asset class.

“Diversification into alternatives is an important part of any family office or institutional strategy. In the past five years, the evolution of the traditional reinsurance market and standardization around casualty ILS has created an opportunity for private capital to generate returns superior to other low-beta assets on a risk-adjusted basis,” said Co-Founder Peter McKelvy.

The core focus of Northern Re will be on high-frequency, low-severity risks that represent highly modeled and steady returns to capital partners. The company has built significant regulatory and financial infrastructure which unlocks more tailored solutions for investors and counterparties alike. Targeted lines of business include, but are not limited to, personal and commercial auto, general liability, workers compensation, and other professional lines. The primary scope of opportunities will be in the regional carrier and MGA/MGU markets where the reinsurance structure emphasizes alignment of interest. The company employs a mix of industry-leading underwriting, analytics and actuarial expertise to meet its partners needs.

“We worked with many of the major fronting companies in the US during our development in order to create a structure that provides exceptional collateral and additional layers of financial security,” said Co-Founder Anthony McKelvy. “Our team has a wealth of experience both in the industry and across verticals. We are excited to already be supporting several great partners throughout the market in Q1 and look forward to future trading relationships with historically strong companies”.

Northern Re operates under a B(iii) license granted by the Cayman Islands Monetary Authority. The company was founded by brothers Anthony, formerly of Willis Re, Guy Carpenter, and Boost Insurance, and Peter McKelvy, of the Park Agency family office, and formerly of Uber and Boost Insurance. Northern Re expects to bring additional capital capacity online in 2023.