Pension investment firm PGGM, allocating on behalf of end-client the Dutch pension fund PFZW, subscribed for an additional $175 million of shares in its RenaissanceRe managed joint-venture rated reinsurance underwriting vehicle Vermeer Re during the third-quarter of 2024.The move shows the pension investors attraction to the current market opportunity, we suspect, with the increased scale now building the Vermeer Reinsurance Ltd.consolidated balance-sheet assets back to $2.2 billion at the end of September.Vermeer Reinsurance Ltd.

(Vermeer Re) was .The launch saw the RenaissanceRe Capital Partners division partnering with long-time insurance-linked securities (ILS) institutional investor PGGM and its client PFZW, with Vermeer Re becoming the first managed and ‘A’ rated reinsurance vehicle for a single pension investor.The reinsurer has proven a very profitable route to access reinsurance-linked returns for the pension investor PFZW, with the investment in Vermeer Re having grown over time and by also rolling the income generated, Vermeer Re’s total balance-sheet had been but has now grown further.

Earlier this year, Vermeer Re’s profitability for its backers became more evident, as in the first-quarter of 2024 PFZW benefited from a significant dividend from Vermeer Re, amounting to $175 million.At the same time, for the first-quarter of 2024, Vermeer Re had generated almost $53 million of net income attributable to the pension backers of the reinsurance company.Vermeer Re then generated $13.25 million of net income attributable to its backers for Q2 and a larger $73.5 million for Q3, taking nine-month income to $183 million, up on the $151.5 million of the prior year period.

Further demonstrating the profitability of this joint-venture reinsurance strategy for the pension investors.While the $175 million dividend was taken earlier this year, it’s encouraging to see this additional $175 million investment made by PGGM for PFZW, as it shows the investors looking to deploy capital efficiently into reinsurance and recognising that Vermeer Re has a market opportunity ahead of it, so can benefit from the additional scale it seems.At $2.2 billion as of September 30th 2024, the Vermeer Re consolidated balance-sheet assets are now up by $500 million in just one year.

Vermeer Re equity had reached $1.74 billion at that date, up from $1.49 billion at June 30th, reflecting the growth in the PGGM / PFZW investment in the vehicle as well as rolled profits.It’s clear that, alongside the recent subscription for an additional $175 million of shares by the pension investors, PGGM and PFZW have continued to roll the profits generated by the reinsurer back into its balance-sheet firepower, helping to increase its scale and make it an even more meaningful player at reinsurance renewals as a result.Vermeer Re continues to be right-sized for the current reinsurance underwriting opportunity by its investors and clearly continues to deliver attractive gains for PFZW’s investment into the reinsurance joint-venture.

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