
BMA licenses Mereo companies
Mereo Insurance, the start-up backed by re/insurance industry legend Brian Duperreault, has been licensed by the Bermuda Monetary Authority.
The BMA licensed Mereo Insurance, which is classified as a Class 3B insurer and also approved Mereo ILS Opportunities, which is a special purpose insurer, on December 12.
There was no official comment from the company.
Mereo’s long awaited launch comes just after the January 1 renewals. Mereo is supported by Mereo Advisors, an investment management firm which says its mission is to democratise direct investment into insurance related risks.
Mereo is chaired by Duperreault, who previously has been chief executive officer of AIG, Marsh, ACE (now Chubb) and Hamilton Insurance, which he founded after leaving ACE.
The chief executive officer and chief underwriting officer is David Croom-Johnson, the former CEO of AEGIS in London, which he led from 2015 to 2022 and more than doubled gross written premium during that time. According to his LinkedIn page, he is now based in Bermuda.
Other executives who have joined Mereo include Richard Holden, the former chief underwriting officer of Fidelis’ Bermuda arm and its global CEO of reinsurance, who will be CUO at both Mereo ILS and deputy CUO of Mereo Insurance.
Former IQUW and Ariel Re executive Federico Waisman is chief analytics and risk officer for the company, with former Hamilton chief financial officer Jonathan Reiss named interim chief financial officer at Mereo, while maintaining his seat at Strategic Risk Solutions.
Lawrence Minicone, a former head of research at hedge fund Tekmerion and previously Bridgewater, is chief investment officer for the Mereo re/insurance unit.
Neil Strong, a former Securis and IQUW executive, is a consultant to Mereo, and has been tipped to be president and head of its ILS unit.
Mereo was previously reported as being close to finalising a $650 million capital raise. Reports of the company have been circulating since September, 2023.
Last February, AM Best said Mereo expected to record rapid premium growth when it started underwriting. The ratings agency assigned the start-up an A- (Excellent) preliminary financial strength assessment.
"Initial capitalisation in 2024 and retained earnings through the forecast period are expected to support premium growth, which is expected to be rapid in its early years, based on projections," AM Best said. "Capital is anticipated to be managed through the use of reinsurance and potentially third-party capital.
"Investment risk is projected to be low given a conservative investment portfolio, which will remain matched closely to the evolution of the liability profile, supporting stability in future balance sheet metrics."
The agency added that an adequate operating performance assessment and limited business profile assessment were based on Mereo’s business plan.
"The plan includes rapid premium growth in its first years and improving operating profitability that supports an adequate operating performance assessment. Outlined in the plan is a portfolio composed of casualty and specialty business diversified by subcategories, geographies, and attachment points."
Class 3B insurers are described by the BMA as large commercial insurers whose percentage of unrelated business represents 50% or more of net premiums written or net loss and loss expense provisions and where the unrelated business net premiums are more than $50 million.
Class 3B insurers have lower capital requirements than Class 4 insurers, which ae required to have minimum capital and surplus of $100 million. The Floor for Class 3B insurers is $1 million.
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