Bermuda-based Aeolus Ltd. today announced its entry into the global reinsurance market with an initial capitalization of up to $500 million financed by a group led by Warburg Pincus and the company’s founders, Peter Appel and David Eklund.
Arch Capital Group Ltd. also has agreed to invest in the company, subject to its board approval.
Aeolus Re said it will operate as an unrated reinsurance platform initially targeting the property catastrophe segment of the worldwide reinsurance market.
The new carrier will offer property catastrophe protection to insurers and reinsurers on both an ultimate net loss and industry loss warranty basis, the company said.
Aeolus will be led by Mr. Appel, who will serve as chairman and chief executive officer of Aeolus Ltd., and Mr. Eklund, who will serve as chairman of Aeolus Re.
Previously, Mr. Appel served as chief executive officer of Arch Capital, while Mr. Eklund was president of Renaissance Re.
Bert Golinski, most recently a managing director and head of the Bermuda office of Guy Carpenter & Co., will serve as president of Aeolus Re. Joseph King, the former head of Arch Reinsurance Company’s U.S. property department, will be the chief underwriting officer of Aeolus Re. There positions are subject to immigration approval by Bermuda authorities.
Mr. Eklund said that other recent entrants into the property reinsurance market have noted that demand for property catastrophe reinsurance capacity has outstripped supply following the 2004 and 2005 hurricane seasons.
“This imbalance continues to grow, driven in part by the changes in rating agency guidelines and catastrophe models that have significantly increased capital requirements for rated reinsurers,” he said.