About Horseshoe Re
Horseshoe Re Limited is a flexible and efficient platform providing a link between the reinsurance market and investors desirous to participate in insurance risk.
Horseshoe Re is licensed under a Bermuda Private Act (“Private Act”) and registered as a Class 3 insurer under the Insurance Act 1978 (“Act”). Under the provisions of the Private Act, Horseshoe Re may establish separate accounts whose assets and liabilities are legally segregated from the assets and liabilities of other such segregated accounts of the company and Horseshoe Re’s ‘core’ account. Horseshoe Re’s Class 3 insurance license permits the issuance of reinsurance contracts on a fully-collateralized basis.
Third party investors, through distinct segregated accounts, can participate in single contract reinsurance transactions such as ILWs, Quota Share treaties, and Catastrophe Excess of Loss treaties. The third party investors thus enjoy the entire risks and rewards associated with underwriting reinsurance transactions. Investors ‘rent’ separate accounts from the Company.
Investors using Horseshoe Re include Hedge Funds, Pension Funds, Private Equity Firms, Banks and Private Investors.
Typically, investors participate in reinsurance risks of third-party reinsureds. However it is permissible for an investor to assume related insurance or reinsurance risk (known as ‘captive’ risks).
Investors typically purchase non-voting preferred stock of a specific segregated account, governed by a Subscription and Shareholders agreement. Each segregated account's maximum insurance or reinsurance liability is collateralized at inception through a Letter of Credit or Reinsurance Trust arrangement.
Some key benefits for investors in using segregated accounts to write insurance and reinsurance risks:
- Allows investors to participate in discrete reinsurance contracts with no legacy issues, which would not be possible via investment into existing insurance and reinsurance entities
- No credit rating required, since all deals are fully collateralized from inception
- Avoids many other types of non-underwriting risks inherent in investing in insurance and reinsurance entities
- Investors in the segregated accounts are non-voting preferred shareholders and are generally not required to consolidate such investments
Some specific benefits for investors utilizing Horseshoe Re to write reinsurance risks:
- No need for infrastructure for accounting and other back office functions including monitoring regulatory compliance, as this role is carried out by the Horseshoe Group
- Immediate access to market. The Company is a fully licensed Class 3 insurer under the Insurance Act 1978 in Bermuda
A more extensive presentation on Horseshoe Re is included in our Information Center