Ryan Specialty Group (RSG) has been in Monte Carlo this week marketing its proposed reinsurance start-up to brokers, as it eyes a launch in the first quarter of next year, The Insurance Insider understands.
Long-time Aon executive Mike O’Halleran, who has taken up a role at RSG, is understood to have been holding meetings at the Rendez-Vous to explain the concept.
A capital raising exercise is also going on in parallel, it is understood, with sources suggesting that good progress has been made.
The Insurance Insider first revealed in June that Pat Ryan’s business was in the early stages of a project to create a rated reinsurer, with the plans now developing towards the point where a launch date is being mooted.
As previously reported, the rated reinsurer would offer quota-share reinsurance to insurers that support RSG’s $1bn+ premium MGU platform.
The size of the fundraise is not known, but to secure an A- rating from AM Best it would likely need to start operations with at least $500mn of capital.
It is understood that RSG would put up a minority of equity for the reinsurance entity itself, but it would look to raise most of the capital from third parties.
Sources said that RSG believes the insurers that back its MGUs will be supportive of the initiative because it offers reinsurance capacity to allow them to gear up their line sizes and because it strengthens RSG’s alignment.
The quota-share reinsurance support would be offered to paper providers, but insurers backing the MGUs would have the option either to opt out or to use the capacity selectively.
If the project comes to fruition in its current form, RSG would make money both from raising the third-party capital and from its share of underwriting profit generated by the reinsurance entity.
The reinsurer would operate entirely separately from wholesale broker RT Specialty.
RSG declined to comment.