The initiative includes a substantial capital raise of $270 million in equity, attracting participation from institutional and industry investors, including minority stakes from Nationwide, Enstar Group, the TIH investor group, and the Starwind management team. As part of the transaction, a subsidiary of Enstar Group has entered into an agreement to provide sidecar investors with an option to obtain finality through a novation transaction after a specified period.
Bill Goldstein, CEO of TIH Underwriting, said: “The launch of Fractal Re demonstrates Starwind’s ability to meet the needs of our customers and distribution partners by expanding our casualty and specialty capacity.”
Enstar developed the Forward Exit Option (FEO) solution specifically to deliver finality to third-party insurance-linked securities investors. Additionally, Stone Point Credit will serve as the investment manager for Fractal Re, targeting a diversified portfolio of credit strategies designed to align with the vehicle’s liability profile.
As part of an expanded strategic partnership, State National will act as the fronting carrier for Fractal Re. The new reinsurer is set to engage in a broad portfolio of casualty and specialty risks underwritten by Starwind, a managing general agent (MGA) platform specialising in niche and exclusive insurance products, with an annual gross premium volume exceeding $3 billion. The multi-year reinsurance agreement takes effect on October 1, 2024.
The launch of Fractal Re signals a strong investor interest in collaborating with top-tier underwriting teams while reflecting Starwind’s ongoing commitment to enhancing its service offerings for customers and distribution partners by increasing capacity through third-party capital.
Matt Freeman, CEO of State National, commented, saying: “We’re delighted to support an innovative securitization of casualty insurance risk that delivers meaningful reinsurance capacity to Starwind, attractive risk -adjusted returns to investors, and reliable, high quality reinsurance security to State National.”
Jim Carey, Co-CEO of Stone Point, said: “We believe Stone Point Credit’s experience managing capital for the insurance industry, combined with Starwind’s market leading underwriting, will enable us to generate substantial value for all stakeholders.” –
