Leadline Capital Partners launched by Ascot as dedicated third-party capital unit

Ascot Group, the specialist global re/insurance underwriter owned by Canadian pension allocator CPP Investments, has launched a new dedicated third-party capital management platform named Leadline Capital Partners, as it looks to expand its activities in the space and brings on new investors to support it.

Leadline Capital Partners is seen as a unified capital management platform, representing a formalisation of a range of activities already undertaken where Ascot works with third-party institutional investors, but also an expansion of the range of activities as well.

The new dedicated Leadline Capital Partners third-party capital management platform will support Ascot’s already established third-party capital business and comes with some new key relationship with institutional investors, the company said.

Ascot said it has entered into a partnership with institutional investors to provide collateralized reinsurance for its global property portfolio, with this arrangement structured using a Bermuda registered special purpose insurer (SPI).

Which sounds like a sidecar, of sorts, so potentially a new collateralized quota share structure to support Ascot’s property underwriting business.

Ascot said that Leadline Capital Partners builds on its capital partnership business, which has a four-year track record of delivering strong returns to investors, with ceded gross premiums in excess of $225 million to date.

“Through Leadline Capital Partners, we are drawing on Ascot’s heritage of excellent underwriting and creative risk solutions to provide attractive and innovative offerings to third party capital,” explained Charles Craigs, Ascot Group Managing Principal for Third-Party Capital. “We are very pleased to announce the latest collaboration as we expand this business.”

Justin Keith, Ascot Bermuda Limited President and CEO, also said, “We look forward to the continued expansion of our alternative capital business under Leadline Capital Partners.

“This business represents the best of all worlds for Ascot and its stakeholders: incremental capacity delivered to our insured and reinsured clients, an attractive risk-adjusted return profile to a leading capital partner, and the continued opportunity for the company to deliver its world- class capabilities to both clients and investors.”

The new capital partnership transaction was structured and placed by Aon Securities LLC, while Willkie Farr & Gallagher LLP provided principal legal counsel, Ascot said.

Leadline Capital Partners is just the latest example of a major re/insurer formalising its third-party capital activities under a new brand name and given the levels of investor interest in reinsurance and insurance-linked securities (ILS), the timing is opportune for Ascot to do this.

As we revealed earlier today, Ariel Re is establishing Ariel Re Capital Partners as a new unit for certain of its third-party capital activities.

It follows Everest expanding its third-party capital related activities under a new insurance manager unit, Mt. Logan Capital Management.

Having dedicated resources and a brand name to differentiate, is becoming important for re/insurers as they look to expand the scope and size of third-party capital and ILS investor relationships.

Ascot is just the latest and it certainly won’t be the last, which underscores the continued maturation of re/insurers relationships with third-party investors, as well as investors desires for more options to deploy capital to the reinsurance market.