Fermat Capital Management is set to leverage its underwriting and analytics expertise to launch new entity Fermat Re, as it demonstrates its desire to take greater ownership for the origination, structuring and management of reinsurance investment opportunities, while creating turn-key portfolios for clients.Fermat Capital Management is well-known as a leading insurance-linked securities investment manager, in the main for its long-standing catastrophe bond fund strategies.In recent years, the company has branched out and expanded its activities, with first and then casualty risk ILS investment initiatives, which offer some evidence of Fermat’s ambitions to continually evolve the scope of its reinsurance investment offerings.Now, Fermat Capital Management is launching Fermat Re as an underwriting entity, showing the firm’s desire to originate more unique and bespoke reinsurance investment opportunities for capital partners, while taking greater ownership for generating transaction flows to satisfy and feed their appetites for access to insurance risk-linked returns.

Fermat Re will work with select insurance capital partners to co-develop customised portfolios of insurance risks, a turn-key approach like a reinsurance managing general underwriter (MGU).The goal is to unlock cross-cycle profitable growth for investor clients, by utilising an analytical, underwriting-first approach.Transparency and alignment are expected to be key, in terms of risk analytics and opportunity selection for capital provider clients by the new Fermat Re underwriting entity.

The launch of Fermat Re reflects a desire to leverage the deep expertise Fermat has developed over the years to deliver more customised insurance-linked investment solutions for capital partners, across what might also be a fuller range of reinsurance opportunities.As we said, it demonstrates in spades a desire to take greater ownership of originating, structuring and managing bespoke reinsurance portfolios for large investor clients, we believe.James Hole, the former co-founder of reinsurer Cincinnati Re, has been hired as the CEO of Fermat Re.

Hole took Cincinnati Re from underwriting zero to $3 billion in premiums between launch in 2015 and year-end 2024, while the reinsurer delivered a cumulative 93% combined ratio across some of the most challenging years in the reinsurance marketplace.Before developing and launching Cincinnati Re as a reinsurance division for its parent Cincinnati Financial, Hole worked as a reinsurance broker at JLT Re and at Towers Watson, Fermat Capital Management stated that it is launching Fermat Re to, “provide leading reinsurance underwriting, analytics, and portfolio management capabilities to select Insurance Capital Partners.” The company further said that, “Backed by Fermat’s proprietary CatAPM models and world-class analytics team, Fermat Re combines Fermat’s proven analytical and portfolio management excellence with deep reinsurance expertise.” The ILS investment manager aims to develop a turn-key, efficient business model for connecting capital providers with bespoke reinsurance portfolio opportunities through Fermat Re, it seems.Scalability is also part of it and by venturing further towards and owning more of the underwriting, originating and structuring parts of the reinsurance investments value chain, Fermat will be able to generate unique opportunities and construct portfolios that can be sized to meet the needs of larger investors, we suspect..

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