AXIS sets up another Monarch Point Re collateralized insurer in Bermuda

AXIS Capital, the Bermuda based specialty insurance and reinsurance company, has now established a third collateralized insurer class of company on the island to support the continued expansion of its Monarch Point Re casualty insurance-linked securities (ILS) platform.

Recall that, AXIS Capital announced last year that it had teamed up with investor Stone Point to launch Monarch Point Re, which had been capitalised by a more than $400 million raise and was set to operate as a kind of third-party capitalised casualty reinsurance sidecar structure, with a total return approach.

Prior to that launch, we had reported that two new examples of the collateralized insurer class of company had been set up in Bermuda, with Monarch Point Re (ISAC) Ltd. and Monarch Point Re (ISA 2023) Ltd. both registered by the Bermuda Monetary Authority (BMA), the island’s regulator.

Those two vehicles were also collateralized insurer companies, named Monarch Point Re (ISAC) Ltd. and Monarch Point Re (ISA 2023) Ltd.

The two collateralized insurer’s were registered by the Bermuda regulator in May 2023.

Now, presumably to support the continued expansion of the Monarch Point Re casualty ILS quota share sidecar, a third structure has been registered with the BMA.

In February 2024, AXIS had Monarch Point Re (ISA 2024) Ltd. registered as a collateralized insurer class company.

The launch capital raise for Monarch Point Re saw over $400 million of equity raised, including a $75 million investment from a subsidiary of AXIS Capital and a $75 million investment from Stone Point Credit Adviser LLC.

Monarch Point Re operates out of Bermuda and underwrites a diversified portfolio of casualty reinsurance business, retroceded to it by subsidiaries of AXIS Capital through a quota share arrangement.

Stone Point Credit is Monarch Point Re’s exclusive investment manager, with a diversified portfolio of corporate credit the allocation strategy, providing a total-return approach thanks to the longer-tailed liability ILS nature of the subject business which allows more flexibility in the investment strategy.

The multi-year reinsurance agreement underpinning the structure became effective from January 1st 2023 and subsidiaries of AXIS Capital anticipated retroceding around $400 million of reinsurance written premium for the first year of the reinsurance agreement.

As we reported, the launch of Monarch Point Re helped AXIS Capital grow its activities with third-party investors in 2023, ceding 17% more in reinsurance premiums to them.

With the launch of an additional collateralized insurer structure for 2024, presumably the reinsurance agreement will see more in premiums ceded through it this calendar year as well.