Ariel Re is to separate out risks it underwrites by aligning its established Syndicate 1910 with the Bermuda ILS peer group through adopting a pure property catastrophe reinsurance focus for the vehicle, the company said today.Ariel Re, the Bermuda based reinsurance firm that is a meaningful user of third-party capital within Lloyd’s, its Capital Partners unit and for its own hedging through catastrophe bonds and other structures, will launch a new Syndicate 2006, as it separates its Lloyd’s business into two.Ariel Re has now got ‘approval in principle’ from Lloyd’s to establish Syndicate 2006, named after the year of its launch.The new syndicate will have a balanced portfolio of Property Catastrophe; Other Property; Marine and Specialty; Cyber; and Clean Energy business (trading as Ariel Green), the company explained.

But, more interestingly, Ariel Re said its Syndicate 1910 will now become property catastrophe reinsurance focused only.The company said this move to only underwrite property cat aligns the syndicate “to its ILS peer group in Bermuda, but with advantages of being a rated Lloyd’s carrier.” Why is this interesting? Because Ariel Re has a track-record of helping investors to efficiently access the returns of reinsurance in its business, .So, it’s possible Ariel Re may be able to encourage new capital to join its Syndicate 1910, which may appeal to more investors given the property cat reinsurance focus.

While the fact the company likens the move to the “ILS peer group in Bermuda,” may suggest it is pitching Syndicate 1910 as a Lloyd’s based alternative to an ILS fund, something that could perhaps be achieved through the use of London Bridge as a funding structure.Deploying capital through infrastructure into the Lloyd’s market can be beneficial to investors, given the global licenses and the leverage embedded in the market structure there.Using London Bridge 2, perhaps with the assistance of Ariel Re Capital Partners, could be a compelling way to build the capital-base of the syndicate once it is property cat only.

“We are excited to expand our presence in the Lloyd’s market with the launch of Syndicate 2006,” explained Ariel Re Managing Agency Managing Director Darren Lednor.“Lloyd’s is fundamental to our strategy, and with this new syndicate, we are seeking to better appeal to the demands of our target capital base by offering differentiated investment products.“We are seeing strong interest from existing as well as potential new investors, and we expect Syndicate 2006 to be accretive to Ariel Re in 2026, and as the syndicate grows in 2027 and beyond.”.

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