Hannover Re, the global reinsurer, is establishing a Bermuda based insurance-linked securities (ILS) platform named Hannover Re Capital Partners, as it looks to round-out its offering to ILS investors and the market, while creating a new avenue to manage and deploy third-party capital to augment its business activities, we understand.Artemis has learned that this new Bermuda based ILS platform will operate as an underwriting agent and akin to an ILS investment manager for Hannover Re, writing business backed by third-party capital from investors, while presumably also generating fee income for the firm.Hannover Re is already very active in insurance-linked securities (ILS) of course, from its fronting of risk for catastrophe bond sponsors, to its fronting and transformation of reinsurance into collateralised investment opportunities for specialist ILS fund managers and investors.This new venture sees Hannover Re looking at add something more akin to an ILS investment manager itself, a more direct ILS play, with the company said to see an opportunity to build-out more third-party capital to deploy into its underwriting business, while managing that risk for the third-party investors and earnings fees and performance income as well.

Artemis has learned that the new Bermuda ILS platform will operate under the brand Hannover Re Capital Partners.Hannover Re Capital Partners Limited already exists in Bermuda having originally been registered back in late 2020 under the name Bristol Re Ltd., which was licensed for a while as a Class E re/insurer.This Bermuda-based entity was renamed to become Hannover Re Capital Partners Limited in October 2024, filings show.

We’re not entirely sure what type of license Hannover Re Capital Partners has today, but we understand from sources that it is considered an underwriting agent by its parent firm.Hannover Re declined to comment, but we have also learned from market sources that the intention of the reinsurance firm is to use third-party capital to underwrite more non-proportional catastrophe business for its clients, to complement its existing ILS capital supported offerings.We understand the Hannover Re Capital Partners set-up is still in progress, but multiple market sources confirmed that Aaron Garcia, a former head of investments at Hiscox ILS in Bermuda, is set to join the new venture in a senior role.

With demand for natural catastrophe capacity seen as rising, we are told Hannover Re sees an opportunity to expand its activities in the ILS market, by more directly managing portfolios of reinsurance related risks for investors.This Bermuda based ILS strategy manager is seen as a way to complete the insurance-linked securities (ILS) offering Hannover Re offers to the market, while offering more capacity to clients.We understand dedicated ILS fund strategies may become part of the offering once the set-up of Hannover Re Capital Partners is completed, which would make perfect sense given the reinsurer is already very active in more transaction-specific ILS offerings for investors, such as its collateralised fronting through structures like its Kaith Re vehicle.

It appears Hannover Re Capital Partners may be seen as a way to offer a portfolio managed approach to reinsurance investments for third-party capital providers, the first time Hannover Re would have embraced this more typical ILS manager model and marking a further deepening of its activities in reinsurance capital markets.We are told that a formal launch of Hannover Re Capital Partners may come later this year, once set-up and investor discussions are completed.It would make sense for the venture to look to construct its first portfolios through the end of year negotiations for January 1st 2026 reinsurance renewals, when additional third-party capital can be put to work by Hannover Re most readily, we suspect.

As the biggest reinsurers in the world get deeper into ILS markets and develop specific offerings for investors, it can provide differentiated options for capital deployment, given the significant diversification that globally active reinsurance companies are able to bring to ILS portfolios given their access to risk.Large reinsurers can transact with their clients to source risk as usual, tapping the additional pool of ILS capital, while ceding small shares of contracts and positions back to funds or other ILS structures, to construct well-diversified and compelling investment opportunities..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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