The latest class of Bermuda startups may well be the last of its kind, some members of the Class of 2005 predicted recently, although dissatisfaction with the Bermuda domicile is not the reason, they say.
“One can speculate that new capital coming into the market would go to existing players in the form of sidecar vehicles,” said Gary Prestia, chief underwriting officer for North America at Flagstone Reinsurance.
He was referring to special purpose vehicles in which third-party investors, such as hedge funds or private equity funds, collaborate with an underwriter to provide additional capacity to existing reinsurers for property-catastrophe retrocession or short-tail lines of business. This form of temporary capital became more popular than it had been in the past at about the same time the Class of 2005 sprouted up.
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