Ark sidecar Outrigger Re renewed for 2024 with increased third-party capital

Ark Insurance Holdings Limited, a property and casualty insurance and reinsurance subsidiary of the White Mountains Insurance Group, Ltd., has successfully sponsored a renewal of its $250 million collateralized reinsurance sidecar, Outrigger Re Ltd. for the 2024 calendar year.

For 2024, parent White Mountains remains the lead investor, contributing $130 million of the $250 million in capital for 2024.

A year ago, White Mountains gave another demonstration of its appetite for deploying capital to insurance-linked securities (ILS) and reinsurance-linked investment opportunities when it became the lead investor in the first vintage of subsidiary Ark Insurance Holdings’ $250 million collateralized reinsurance sidecar Outrigger Re Ltd.

The timing was excellent, as the Outrigger Re sidecar helped sponsoring re/insurer Ark to underwrite more risk in a particularly attractive market environment.

Outrigger Re assumes global property catastrophe excess-of-loss reinsurance business from Ark, so augmenting the re/insurers capital base and helping in moderating the effects of any losses at the same time.

The $250 million renewal of the Outrigger Re sidecar is for business incepted during calendar year 2024 and was on similar terms to those in place for calendar year 2023.

Outrigger has entered into a quota share arrangement with Ark that will see it provide collateralized reinsurance protection on a portion of Ark Bermuda’s global property catastrophe portfolio, beginning January 1st 2024.

With $250 million of total investor capital raised for January 1st 2024, White Mountains has provided $130 million and the remaining capital came from both new and continuing third-party investors.

Which means the Outrigger Re sidecar has shifted to become more third-party capital focused for 2024, given White Mountains stake was $205 million for the 2023 calendar year.

That shift helps to maintain the benefits for the Ark business, with collateralized capacity flat year-on-year, but will bring an increased level of fees income given more of the capital is from external investors for this sidecar renewal.

Manning Rountree, Chief Executive Officer of White Mountains, commented on the news, “We are pleased to continue supporting Outrigger Re and the underwriting team at Ark.

“We view new investor interest as recognition of Ark’s strong execution in the on-going hard market.”

Ian Beaton, Chief Executive Officer of Ark, added, “Outrigger remains an important strategic capability for Ark in the current market.

“We are pleased to see expanded investor interest in supporting Outrigger including White Mountains’s ongoing lead commitment.”

As we reported in November, the Outrigger Re reinsurance sidecar has been delivering increasing benefits to Ark, with both the premiums earned attributed to the Outrigger Re sidecar and the income it has generated both rising.

In fact, the pre-tax income earned by White Mountains from its stake in Outrigger Re had reached $53 million for 2023 up to the end of September, an attractive additional source of investment income for the holding company.

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