Chubb’s ABR Re will raise $210m, adding a new asset manager – Artemis.bm

ABR Reinsurance Capital Holdings Ltd., the parent of Chubb’s leading reinsurance company and the third-party capitalized reinsurance joint-venture ABR Re, has raised $210 million in funding from a new investment manager that will oversee it. portion of reinsurers’ assets.

The move will net shareholders of ABR Re approximately $1.12 billion, while adding additional cash flow to manage the growing asset pile (north of $2bn).

ABR Reinsurance Capital Holdings Ltd., the parent of ABR Reinsurance Ltd. (ABR Re), a reinsurance company, was founded in 2015 by Chubb (ACE at the time) as a full refund, or cash tracking, joint venture. car.

ABR Re represents the third group in Chubb’s international insurance brand, having refinanced $800 million from third-party investors and affiliates, namely Chubb and asset manager Blackrock.

Blackrock offers a way to sell a car reinsurance, while both parties receive income from ABR Re, according to the fees and profit shares.

Now, it has been revealed that another party is joining in, in the form of an unnamed private equity firm.

ABR Re has successfully raised $210 million through a public share offering, with the shares being offered to an unnamed investment firm.

The investment firm will now manage a portion of ABR Re’s assets, thus taking an equal stake in Blackrock.

The private equity firm is a multi-strategy manager that invests in the private and public markets and has more than $80 billion in assets under management.

Insurance Advisory Partners acted as financial advisor to ABR Reinsurance Capital Holdings Ltd.

Now, with another $210 million in funding, ABR Re’s Equity capital has surpassed $1 billion. Total shareholder equity is now approaching $1.2 billion at this point, we’re told, thanks to ABR Re’s acquisition.

ABR Re has been a valuable asset to Chubb, as a third-party source of reinsurance-based financing, in which Chubb has ownership and profits, and as an additional asset for capital growth due to its comprehensive financial management- return style.

In the past this asset management was only provided by Blackrock, but now this second asset manager has joined the partnership and will take part of ABR Re’s growing portfolio of assets to manage as well.

ABR Re booked Chubb’s $464 million in 2021, up significantly from last year’s $350 million.

The lender now has more than $2 billion in assets, which were previously managed by Blackrock.

Now, this additional investment will allow ABR Re to take on more risk from Chubb, expand its assets even further and bring in an additional financial manager at this time, in the current market where reinsurance has become very expensive, making it perfect. wisdom.

Chubb benefits from the functionality of the reinsurance market that ABR Re provides, because it allows the company to use a low-cost and dedicated source of reinsurance, which is provided by a third party and increases its level according to its limits. deploy, which earns a fee and may pay a minimum or regulatory fee.

ABR Re is an internal reinsurance vehicle and has a strict policy to only underwrite the risks that Chubb issued and is said to also follow the market for the business.

Making ABR Re the best third-party source of insurance coverage, in which Chubb has ownership and profit.

Chubb’s ABR Re position is an exciting third-party reinsurance strategy, offering the power of a dedicated source of strong reinsurance, combined with the flexibility and flexibility of an investment strategy, bringing additional benefits through the value of ownership and sharing. in underwriting and cash flow.

For third-party brokers, ABR Re provides access to Chubb’s underwriting acumen to obtain insurance-linked returns, while simultaneously tapping into Blackrock’s wealth and this additional investment manager.

With ABR Re’s growth right now, Chubb can significantly control its reinvestment costs in a tough market environment.

There is, of course, the possibility that ABR Re may also look to rewrite the market risk, which would be attractive in the current market. But it seems that raising new capital from ABR Re will only allow the lender to be more helpful to Chubb, as a dedicated and third-party capitalised, full recovery.