Bermuda-based insurance manager Horseshoe Group has formed a new unit designed to help asset managers form their own reinsurance company without significant start-up costs.
Convergence Risk Services (CRS) will use the existing platform and capabilities Horseshoe offers in the management of reinsurance companies, according to the firm. It will form standalone reinsurance companies for asset managers seeking a cost effective way to form their own reinsurance company without significant start-up costs or large initial capital expenditures.
CRS has successfully licensed the first reinsurer on its platform, according to Horseshoe.
Steven Musicant has been hired by CRS to act as its new chief underwriting officer. He will underwrite on behalf of CRS clients. Horseshoe chief operating officer Brenton Slade has been appointed as chief executive officer (CEO) of CRS.
“We are extremely excited about the formation of CRS and our ability to leverage our existing infrastructure to provide full-service solutions in the formation of these type of reinsurers,” said Andre Perez, CEO of Horseshoe.
“We believe there will be a significant demand from small and medium sized asset managers to form cost effective reinsurers to enter the casualty market. Taking a page out of the ILS market book, the reinsurers on the CRS platform will fully collateralize their obligations which will make them top reinsurance security without the need of an agency rating.”
Slade added: “CRS will effectively act as a launchpad for this type of reinsurer by providing a cost effective solution to start operations without committing to significant costs until the business ramps up.
“CRS is unique in its ability to provide market facing underwriting services to clients on our platform and Steve Musicant has an excellent underwriting track record. We view this as the next generation in casualty underwriting and a new chapter in convergence products expanding outside of the property catastrophe markets.”
The first asset manager-sponsored reinsurer to be launched on the CRS platform is intending to combine the casualty reinsurance underwriting expertise of CRS with an actively managed investment portfolio.
Horseshoe Group, Convergence Risk Services, Steven Musicant, Bermuda