Ledger Investing has successfully launched and funded a new casualty sidecar facility, securing up to $100 million in capital to support a global reinsurer’s casualty reinsurance business over the next three underwriting years. This capital will be deployed on a quota share basis.
Ledger Re SPC, a Cayman-based subsidiary of Ledger Investing that offers institutional investors access to casualty insurance-linked securities (ILS), served as the retrocessionaire for the facility.
Samir Shah, CEO of Ledger Investing, emphasized the significance of this development, marking a pivotal step as the company expands its focus beyond securitizing managing general agent (MGA)-originated portfolios to now providing long-term capital management for leading reinsurers.
The launch coincides with expectations for reinsurers to pursue double-digit increases in U.S. casualty premium rates during the January 2025 renewals, as noted by Fitch Ratings. This move is driven by rising loss costs due to social inflation, a key factor contributing to adverse loss development trends in the U.S. casualty sector. Fitch highlighted these trends as a significant risk to the global reinsurance market, contributing to its neutral outlook for the sector.
Negotiations with cedants are expected to be challenging, as reinsurers contend that the rate increases seen in 2024, which reached up to 15% for loss-affected accounts and 10% for no-loss accounts, were insufficient to address rising costs.
Alex Freiberg, CEO of Ledger Capital Markets, highlighted the growing interest from investors in casualty ILS, noting that the capital efficiencies provided by these products are driving demand from reinsurers.
