Having recently launched Anthony McKelvy, Co-Founder of collateralized reinsurance firm Northern Re spoke to Artemis at RVS in Monte Carlo to discuss how these offerings go beyond traditional quota share, transforming the way cedents access capital and engage with investors.Rather than a one-size fits-all approach, the company’s structured reinsurance solutions are designed to provide customised capital relief, earnings stability, and multi-year continuity, all while aligning with the objectives of both cedents and institutional investors.McKelvy explained to Artemis that the key to this departure from traditional reinsurance starts with developing an understanding of cedents buying objectives.“There could be a variety of motivations for purchasing reinsurance, and then even beyond that, more nuance with working with an ILS player, or a collateralized reinsurer.

It’s trying to understand what those objectives are,” McKelvy told Artemis.“We can ingest that internally and then decide as to which pool of capital ultimately, we want to place that risk with.Matching risk and appetite, which is an important part of our model.

Expanding on that a little bit more deeply, what we’re doing up front with our investors, the level of diligence and I’ll refer to it as, onboarding’ them onto our platform is really critical to the success of the structured solutions playbook.And what I mean by that is we’re getting investor buy-in on what makes us unique as a marketplace.“We’ve talked a lot about what makes us different in terms of cash collateral, beneficiary trusts, unencumbered surplus at the whole level, and so those elements are in place, so that when we’re looking at a structured solution, quota share, cedents are getting the security that they need and that they want.

A lot of this is a departure from kind of the traditional way of doing things with respect to that collateralized transaction,” McKelvy continued.Moreover, McKelvy alongside his brother and fellow Northern Re co-founder, Peter McKelvy recently highlighted how Speaking with Artemis in Monte Carlo, McKelvy explained how it’s been interesting to watch the maturation of the collateralized market in the United States.“I think we can all agree that there’s certainly a standard through which these transactions are occurring, and the NAIC framework really helps to define that.

It’s become quite well understood.Cedents understand the advantages and how that’s going to interact with their credit for reinsurance needs.I think we are going to continue to see that evolve in the US,” McKelvy said.

He continued: “But I think what’s really interesting now is that we’re seeing a similar evolution in UK and EU, which starts with the proliferation of MGAs and program carriers that are beginning to make their way over there, and a lot of the value that they’re providing in the United States is now being recognised.And it’s everything from bringing out that entrepreneurial talent, the capacity supporting it, whether that be collateralized or traditional is there and has appetite now.So what we’re doing is working with cedents to educate them on how these types of deals work under Solvency II or a similar capital framework that they might be governed by.

“We’ve had success with that.We are also working with some Bermuda insurers today and we’re looking at a number of transactions and we hope to grow that part of our book over the next 12 – 36 months.So, we do see adoption increasing.

Obviously, that’s a big part of what we’re doing here at Monte Carlo.” Regarding what role Northern Re will play towards shaping the next phase of growth within collateralized reinsurance, McKelvy believes that it will be very similar to what he’s done in the US, both at Northern Re and in his previous positions.“We want to help boost that education and be a key resource for cedents as they’re exploring this type of purchase.They have traditional reinsurance.

They may have other financing tools, whether it’s surplus notes or equity raises, and then you have what we refer to as kind of the ILS or collateralized bucket,” he said.“We do a lot of work with our cedents to provide them with output of our capital modeling, to talk with them about those regulatory frameworks and all of that is part of the kind of broader, objective discussion.We want to be one of the first movers in the UK and EU to do that.

We do want to make sure that it is done in a manner that is responsible and each of the counter parties are kind of eyes wide open,” McKelvy added.The discussion then turned towards the casualty ILS market, a space which has seen notable growth in recent years.Regarding Northern Re’s view on the long-term opportunity for the casualty ILS sector, McKelvy said: “We’re seeing a huge amount of investor interest right now, and it’s been interesting over the last three or four years to have discussions with all types of institutional capital firms.

We see now in 2025 walking into those rooms that there’s a huge amount of knowledge within those firms that just didn’t exist previously.And that’s because a lot of the benefits, I think, are now being realised.“The diversification side of things, and this nature of reinsurance being an alternative asset class, and the benefits of it from an investor’s point of view are now becoming quite clear.” McKelvy continued: “You see pension funds, endowments, credit funds, other institutions, family offices etc.

who are keen to deploy.I think it’s going to take some time, and just the continued kind of involvement of the products that are being offered.And that’s part of the reason why we like the structured solution space.

It’s really well protected, and in certain cases, can be built around the investment side of things.I think it’s been really interesting to see.We’re very bullish on the opportunity, and we think that both the UK and the EU will play a big part of that.” ..

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