RockRose's $12.5M Wildfire Bet; Nascent Re Taps ILS with $23.5M Preferred Share Deal
By The Reinsurance Daily Editorial ·
RockRose's $12.5M Wildfire Bet; Nascent Re Taps ILS with $23.5M Preferred Share Deal
Nascent Re Finalizes $23.5M Preferred Share ILS Issuance
Nascent Re, a Bermuda-domiciled special purpose insurer established in 2020, has successfully placed a $23.5 million insurance-linked securities (ILS) transaction through a preferred share structure. The deal, issued via the segregated account vehicle "Telford," marks a continued exploration of alternative ILS formats beyond traditional cat bonds. Using preferred shares rather than notes can offer cedents and investors greater flexibility in structuring and risk transfer. This placement demonstrates that smaller, more targeted ILS transactions remain a viable method for sponsors to access capital market capacity for specific reinsurance needs, complementing larger, syndicated placements.
Cayman Islands Eyes Enhanced Reinsurance Appeal with QJS Status
Cayman Islands Premier Julianna O’Connor-Connolly Ebanks is advocating for the jurisdiction to secure Qualified Jurisdiction Status (QJS) from the United States. Achieving QJS would eliminate the need for Cayman-based reinsurers to post reinsurance collateral on business ceded by US entities, reducing frictional costs and improving capital efficiency. This move aims to bolster the competitiveness of Cayman's already substantial reinsurance sector, which counted over 700 licensed insurers at year-end and saw 24 new formations in the first half of 2024. Gaining QJS would level the playing field with other domiciles like Bermuda, the EU, and Japan.
Sage Advisory Frames Cat Bonds as Impact Investing for Resilience
Asset manager Sage Advisory is promoting catastrophe bonds and ILS as effective tools for impact investing, arguing they move beyond simple mitigation to actively fund resilience. The firm highlights the direct link between a bond's payout and a community's ability to recover post-event. The outstanding 144A cat bond market grew by 11.4% in Q1 2024 to reach $47 billion, a segment of the total $111 billion ILS market. Sage Advisory positions this asset class as a measurable and impactful component within the broader global impact investing market, which it estimates to be $142 billion. The core argument rests on the tangible, pre-defined financial response that ILS provides following a disaster.
As capital flows in after a natural disaster, a community’s ability to begin to recover is expedited. When the triggers of a cat bond are met, that capital is deployed to help rebuild the affected areas.
Darby Named Acting Insurance Chief in Maine Amid Leadership Transition
Maine Governor Janet Mills has appointed Timothy Darby as the Acting Superintendent of the Maine Bureau of Insurance. Darby, the current deputy superintendent, steps in for Anne Schott, who is departing after a 2-year tenure. The transition follows a period of notable regulatory action from the bureau, which recently levied an $11.5 million penalty against Harvard Pilgrim Health Care for operational violations. Darby’s appointment provides continuity as the bureau navigates ongoing market challenges in the state.
Seltzer Group Continues Regional Consolidation with Trego Agency Purchase
The Seltzer Group, a Schuylkill County, Pennsylvania-based agency founded in 1968, has acquired the Trego Insurance Agency. This deal consolidates two long-standing family-run businesses in the region, as Trego Insurance was established in 1983. The acquisition brings Trego's team into the Seltzer Group, which now operates multiple offices across Eastern and Central Pennsylvania. The move reflects the persistent trend of consolidation among local and regional insurance agencies, as firms seek to achieve greater scale and operational efficiencies.
Wildfire Specialist RockRose Risk Secures $12.5 Million in Funding
RockRose Risk, a managing general agent (MGA) focused on California’s wildfire-exposed residential property market, has raised $12.5 million in a Series A funding round led by Eclipse. The MGA uses proprietary risk modeling technology to underwrite properties often deemed uninsurable by standard carriers. The funding addresses a critical market dislocation, with an estimated $7 billion in annual uninsured losses from US wildfires. RockRose plans to use the capital to scale its operations and technology, targeting between $30 million and $40 million in premium within the next few years, providing a new, data-driven outlet for capacity in this challenged peril.
Key Takeaways
- The Nascent Re $23.5M preferred share structure offers a template for smaller, bespoke ILS placements; underwriters should evaluate this against traditional collateralized re for specific, non-correlating layers.
- RockRose's $12.5M tech-focused wildfire raise, combined with Sage Advisory's framing of ILS for resilience, shows capital moving towards specialized, model-heavy perils, creating new opportunities for capacity providers outside of traditional property cat treaties.
- The leadership transition in Maine's insurance bureau following a major $11.5M insurer penalty could signal a more aggressive regulatory posture at the state level, potentially impacting rate filing timelines and compliance costs for national carriers.
- Cedents should initiate discussions on how potential capital savings from Cayman's QJS pursuit will be allocated in 1/1 renewals, as gaining the status could free up an estimated 1-2% in trapped collateral on US-sourced business.
Sources
Nascent Re issues $23.5m Telford preferred share insurance-linked securities — artemis.bm
QJS status could further enhance Cayman’s ILS and reinsurance appeal: Premier Ebanks — artemis.bm
ILS & cat bonds show impact investing can move beyond mitigation into resilience: Sage Advisory — artemis.bm
Maine Governor Names Darby as Acting Insurance Chief as Schott Departs — insurancejournal.com
Seltzer Group Acquires Pennsylvania’s Trego Insurance Agency — insurancejournal.com
Fire-Zone Insurance Broker RockRose Risk Raises $12.5 Million — insurancejournal.com