Arch Capital’s Voussoir Re sidecar on another favorite platform – Artemis.bm

Arch Capital Group sponsored a sidecar style special purpose insurance (SPI) vehicle for Voussoir Re Ltd.

Bermuda-based insurance and restructuring specialist Arch Capital has been using Voussoir Re continuously in recent years, as a side vehicle and a feature that enables the company to welcome third-party investors into its business as risk partners.

Voussoir Re has been a key part of Arch Capital in risk sharing with third parties or insured (ILS) investors, we understand in all sectors and loss patterns.

Arch Capital registered Voussoir Re Ltd. in Bermuda in 2019, where special insurance (SPI) and segregated account vehicles have been used as a major part of their shareholding and reinsurance arrangements and to provide insurance-linked notes to investors. .

In 2019, we reported the first $74 million offering from Voussoir Re Ltd., which was part of Arch Capital’s equity-based strategy.

Arch returned in 2020 with a second issuance, $76.5 million from its side car Voussoir Re, with a $20 million Class A tranche of Series 2020-1 and a $56.5 million tranche of Class B, again a side car as a refinancing arrangement parts.

In 2021, Arch supported the third phase, which represents a renovation of approximately $ 70 million for the Voussoir Re range of vehicles.

Then, towards the end of the year 2021, we mentioned the first release that we like to get from Voussoir Re, where the previous releases set records.

In March 2022, Arch Capital refinanced Voussoir Re, with two other preferred shares.

Preferred shares are the most common form of share insurance relationship with large investors and this also allows the issuer to issue shares prior to the transaction, if they so choose. They may also allow access to business books for loss purposes, we understand.

Arch seems to use the Voussoir Re more often than we see, as the offerings in March were for the Series 2022-1 & 2022-2 parts, this latest release has just seen the Series 2022-9 they like.

Therefore, Arch Capital’s reinsurance sidecar SPI Voussoir Re has now also issued some preferred shares, which will be used as a financing mechanism to help third-party lenders refinance the reinsurance business, we think.

Preferred shares can sometimes be used to issue more shares from sidecars, and for a fixed period, or to facilitate private share arrangements between the cedent and an insurance-linked securities (ILS) fund or investor.

In this latest case, Voussoir Re Ltd. has issued 550 Series 2022-9 non-voting and redeemable shares, through a segregated account of Voussoir Re Ltd. 2022-9, and each share has a value of $0.01.

This list of preferred shares has been classified confidentially by well-informed institutional investors.

It is difficult to understand whether what has happened is a part of the division, or a major loss.

It’s also worth pointing out that in the past Arch has also used Voussoir Re to issue notes that some investors see as similar to disaster bonds, as there have been a number of big cat funds that have held Voussoir Re Ltd notes.

As always with this type of secret ILS, details are scarce, so we can’t be sure about the design and the risks involved in the latest release of Voussoir Re for Arch.

For more information on sidecar reinsurance and events see our list of collateralized reinsurance sidecars.