W. R. Berkley continues expansion of Lifson Re sidecar in third-quarter

During the third-quarter of 2022, US headquartered insurance holding company W. R. Berkley Corporation continued to expand the subject business funded by its Lifson Re collateralized reinsurance sidecar vehicle, ceding additional premium to the structure.

We reported back in February, that for 2023 W. R. Berkley had raised additional investor commitments for its Lifson Re sidecar, expanding the vehicles capital base to $380 million.

It was a significant increase from the $250 million of third-party capital that had backed the collateralized reinsurance sidecar for the two previous years.

As a result, with more capital able to support more of its risk, W. R. Berkley has been steadily growing out the pool of risk backed by the third-party capital from its investors that support the Lifson Re sidecar.

The sidecar takes a 30% share on the majority of W. R. Berkley’s reinsurance placements, fully-collateralized and across all treaty reinsurance and retrocessional placements.

After the first-half of this year, W. R. Berkley had ceded $281 million in premiums to Lifson Re, which represented a 24% increase on H1 2022.

Now, after the first nine months of 2023, that figure has increased to $348 million of premiums ceded to the sidecar, up by 13% still on the previous year.

Lifson Re is playing an important role for W. R. Berkley and this year, given the higher returns available in reinsurance and sidecars, it’s likely that the investors backing Lifson Re are on course for a healthy return.

W. R. Berkley launched its Bermuda based special purpose insurer (ILS), named Lifson Re Ltd., in advance of the January 2021 underwriting year, with $250 million in capital raised from third-party investors for the sidecar.

The sidecar has been capitalised by sophisticated global investors with long-term investment horizons. We’re not sure how many investors are now backing Lifson Re in 2023, after the capital increase, but it was two at the sidecar’s launch back in 2021.

Lifson Re operates as third-party capital backed property & casualty (P&C) reinsurance sidecar for W. R. Berkley, participating in its reinsurance cessions and bringing efficient capital market investor funding into its reinsurance tower.

Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.