XL Group and Stone Point Capital have formed a new Bermuda-based company to act as an investment manager in insurance-linked securities (ILS) and other reinsurance capital market products.
Global insurance and reinsurance company, XL Group, provides property, casualty and specialty products to industrial, commercial and professional firms, and insurance companies.
Stone Point is a financial services-focused private equity firm based in Greenwich, Connecticut.
XL Group has a 75 percent ownership stake in the company and funds managed by Stone Point have the remaining 25 percent ownership.
The company will focus ILS and index-linked products as well as on XL-designed reinsurance products. The parties intend to invest up to an aggregate of $135 million in funds to be formed, alongside potential third party investors.
The new venture will offer investors access to both reinsurance capital markets products as well as more traditional reinsurance opportunities, including certain risks currently written by XL Group.
Investors will also benefit from XL’s underwriting, enterprise risk management, analytical strength and reinsurance market experience.
Mike McGavick, CEO of XL Group, said: “Given the combined strength of XL’s 20-plus years of world-class reinsurance underwriting expertise and Stone Point’s proven track record of investment success in the insurance and reinsurance sectors, this initiative fits perfectly with XL’s continuing objective to offer innovative products to our clients and enhance profitability and long term value for shareholders.”
Charles Davis, Stone Point Capital’s CEO, added: “Stone Point is delighted to be partnering with XL on this venture. Stone Point’s relationship with XL dates back to 1986 when our team assisted with the formation of the company. We believe that the convergence of the traditional insurance and reinsurance markets, and the capital markets will continue.”
“This initiative with XL is designed to offer third-party investors an opportunity to invest in this asset class in partnership with one of the world’s premiere reinsurance underwriters.”
