Insurer and reinsurer Ascot Group is reportedly partnering with Antares Capital, a private-credit firm, on a $500 million transaction to create a Bermuda-based reinsurance sidecar called Wayfare Reinsurance, according to a report by The Wall Street Journal.
It’s been reported that the new reinsurance sidecar will be capitalised via equity investments from both Ascot and Antares, with the latter set to serve as the exclusive private-credit asset manager for Wayfare Re.
Antares will also manage some of the assets through its direct-lending strategy, which has a focus on offering senior secured loans to sponsor-backed middle-market firms based in the US.
The report cites Benjamin Concessi, chief strategy and transformation officer for Antares, who revealed that Antares is investing in the deal off its own ~$30 billion balance sheet.
For Ascot, Wayfare Re will provide the carrier with underwriting capacity to support its casualty offerings in the US and Bermuda reinsurance markets, but Wayfare will also continue to service Ascot’s operations in the property space.
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The Wall Street Journal reports that Mark Wilcox, Ascot’s CFO, said: “As we think about growing our business, one of the areas that we’re looking to grow is what we call our third-party capital business. We’ve found an attractive opportunity to bring third-party capital to longer-tail casualty lines.”
Wilcox explained that Ascot has an investment portfolio to the tune of $8.3 billion, of which over 95% is made up of fixed-income assets with a duration of roughly three and half years.
“We do benefit from the fact that our casualty lines have a certain predictability in terms of the payout of claims. As we think about optimizing our risk-adjusted investment returns, private markets is an area we’re interested in allocating to,” said Wilcox, as reported by The Wall Street Journal.
In recent times, private-credit and insurance have increasingly merged as carriers increasingly demand alternative financing.
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