Aspen Insurance and PIMCO form collateralised re/insurer
Bermuda-based Aspen Insurance Holdings and PIMCO Investment Management Company have formed a Bermuda-based collateralised re/insurer focused on the casualty business.
Aspen said that under a long-term agreement, Aspen will be the sole cedant to Bermuda-registered Pando Re and PIMCO will be its exclusive investment manager.
Pando Re, which was licensed by the Bermuda Monetary Authority on March 19, will participate in Aspen’s casualty insurance, global professional lines insurance, cyber insurance and casualty reinsurance business lines through a multi-year, quota share reinsurance agreement where Aspen will receive loss coverage, pay premiums, and earn commissions. The cession incepted on January 1, 2024.
Aspen and PIMCO said the undisclosed level of capital to support Pando Re’s business plan is being provided by investments from a PIMCO-managed fund. Pando Re’s investment portfolio will be comprised primarily of investment-grade rated fixed income assets managed by PIMCO.
"The launch of Pando Re is a continuation of Aspen’s strategy to partner with third party investors by aligning attractive underwriting risks with the right source of capital," the statement said.
"Pando Re benefits Aspen’s casualty insurance and reinsurance platforms through a multi-year capacity agreement, while also driving continued growth of third-party capital and fee income for Aspen Capital Markets."
Brian Tobben, chief executive of Aspen Capital Partners, commented: “We believe now is the right time to bring additional third-party capital to the casualty market and are excited to partner with PIMCO, a leading investment manager.
"We see a significant opportunity for this new capacity to support the needs of our clients, cedants and distribution partners against a backdrop of reduced appetite from the reinsurance market.
“We are delighted to work with PIMCO, who share a similar vision of long-term value creation through highly-aligned risk management on both the asset and liability sides of the balance sheet. We look forward to working with our partners to leverage Pando Re and develop new solutions for the casualty market.”
Harin de Silva, managing director at PIMCO, said: “As a long-standing partner of insurance companies, PIMCO is excited to work with Aspen developing holistic solutions for the casualty insurance market. The nexus of insurance underwriting and investment management has been and continues to be a core focus for PIMCO.”
Deutsche Bank Securities acted as exclusive financial advisor to Aspen and placement agent on the transaction.
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