RenaissanceRe Holdings Ltd.
) announced that it has created a new special purpose insurance
vehicle - Upsilon Reinsurance II Ltd. The company will be based
in Bermuda and will be managed by RenaissanceRe's subsidiary -
Renaissance Underwriting Managers Ltd.
The capital for Upsilon Re II has been provided by various
investors including RenaissanceRe. The new company currently has
a fully-collateralized reinsurance limit of $185 million.
However, Upsilon Re II can raise additional capital and increase
its reinsurance capacity in the future, depending upon the
available opportunities in the market.
The formation of Upsilon Re II has increased RenaissanceRe's
reinsurance capacity to cater to the global retrocessional
reinsurance market. Retrocessional reinsurance refers to partial
underwriting of the reinsurance risk of one reinsurance company
The new special purpose insurance vehicle will help
RenaissanceRe meet its clients' capital requirement. The company
will also facilitate the participation of investors in the
retrocessional reinsurance market.
RenaissanceRe had created another special purpose insurance
vehicle - Upsilon Reinsurance Ltd. - in January 2012 to provide
supplementary capacity to the global retrocessional property
catastrophe excess of loss market for the 2012 underwriting year.
Additionally, in June 2012, the company had created another
Bermuda-based special purpose insurer - Timicuan Reinsurance III
Limited to provide collateralized reinsurance to its portfolio of
reinstatement premium protection contracts in Florida.
RenaissanceRe carries a Zacks #3 Rank (Hold). We maintain a
long-term 'Neutral' recommendation on the stock. Other companies
in the reinsurance business such as
AmTrust Financial Services Inc.
EMC Insurance Group Inc.
) carry a Zacks #1 Rank (Strong Buy).
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