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Duperreault’s Mereo set for 1.4 ~$650mn launch with broad P&C and specialty appetite

ReutersFeb 4, 2025 4:29 PM

By Sophie Roberts, David Bull

- (The Insurer) - The hotly anticipated launch of the rated carrier from industry veteran Brian Duperreault’s start-up Mereo has now been slated for 1.4, having secured ~$650mn in capital with the ambition of growing the pool to $1bn by the end of the year, The Insurer understands.

This will mark Bermuda’s first meaningful reinsurance launch since Canopius Re was granted its Class 4 licence among a number of start-ups that began life during the pandemic.

Mereo Insurance, the main balance sheet vehicle, was approved in December by the Bermuda Monetary Authority (BMA) as a Class 3B insurer. The vehicle is expected to secure an A- AM Best rating after receiving a preliminary A- financial strength assessment in February last year.

It will underwrite across a broad spectrum of property, casualty and specialty classes and is looking to participate both on a proportional and non-proportional basis.

The start-up's ILS fund – Mereo ILS Opportunities Limited – has also been approved by the BMA, with the Neil Strong-led vehicle understood to have already been active at 1 January after a successful initial fundraising.

It has been a long journey for executive chairman Duperreault and his senior management team – led by London market stalwart David Croom-Johnson as CEO and CUO of Mereo Insurance – to get to the point of bringing a rated reinsurance start-up to the market.

After a number of start-ups entered the market in 2020 and 2021, fundraising efforts for new balance sheet vehicles have proved challenging – despite some of the best reinsurance underwriting conditions in over a decade amid the hard market that came in at the start of 2023, at least in property cat.

Instead, investors seeking underwriting risk have preferred the ILS market or to support existing balance sheets either through equity or by backing sidecar-style vehicles.

As a result, even an industry heavyweight such as Duperreault – the former AIG, Marsh McLennan and Ace CEO – has faced a number of investor headwinds since the project's genesis in 2023.

After initial suggestions of a 2024 launch, Mereo was most recently slated to begin underwriting at the start of 2025, but it was confirmed at the end of last year that it would not be taking part in 1 January reinsurance renewals via its rated balance sheet.

Although it had received a preliminary A- financial strength assessment from AM Best in February last year, it was understood that while Mereoʼs capital was in place for 1.1, the final timing of rating approvals was too late to participate in January renewals.

Mereo has reportedly secured support from private equity firm Susquehanna as a major investor. It has been reported there are six key investors made up of a mix of private equity and trade capital.

However, determined not to miss out on the underwriting opportunity, it has been underwriting collateralised deals through its ILS fund, successfully deploying up to $250mn in capacity with “competitive” terms, according to sources.

Mereo has been contacted for comment.

Broad appetite

According to its website, Mereo will have an appetite in its property book to support regional, nationwide and global carriers, with a focus on cat excess of loss business.

It is expected to build a book that is 70 percent US and 30 percent international with a mix of wind, earthquake, wildfire, severe convective storm and flood exposures.

Outside the US, targeted regions will include Europe, Canada, the Caribbean, Japan, Australia and New Zealand.

In addition to cat, Mereo will look to write classes of property business including political violence, terror, nuclear, industry loss warranties and parametrics.

Its specialty book is expected to cover a “broad” mix of classes including marine, energy, aviation, space, political risks, accident and health, crop and contingency, writing on a proportional and non-proportional basis, with a “modest” appetite for retro.

Target clients are set to include global insurers, P&C-focused carriers, Lloyd’s syndicates and MGAs.

Meanwhile, in casualty, Mereo will look to write a “broad” mix of general and excess liability, professional indemnity, E&O, D&O and cyber, across target industries including marine, energy, transportation, financial lines, mid-market general liability and cyber.

It will aim to access business through quota shares of “proven carriers with impressive track records”, according to its website.

Seasoned management team

In addition to former Aegis London CEO Croom-Johnson, members of the leadership team include ex-Hamilton CFO Jonathan Reiss, who holds the same role at Mereo Advisors and Mereo Insurance. JLT veteran Derek Walsh is chief legal counsel and COO of both entities, while former Fidelis executive Richard Holden serves as deputy CUO of Mereo Insurance and CUO of Mereo ILS.

According to the start-up’s website, Lawrence Minicone is CEO of Mereo Advisors and CIO of Mereo Insurance, and Federico Waisman is chief analytics and risk officer for Mereo Insurance.

Former IQUW, Securis and Execution Noble executive Strong is president of Mereo Advisors and Mereo Insurance and CEO of Mereo ILS.

Duperreault is chairman of Mereo Advisors and Mereo Insurance.

A 1 April launch for Mereo Insurance will put it in the mix during a renewal season that is heavily dominated by Australasia, including the key Japanese renewal, but which also includes a meaningful number of US deals.

The next major renewal date is the US wind-heavy 1 June and 1 July renewals, led by Florida and the Southeast.

The belated arrival of Mereo’s balance sheet vehicle will not represent the only reinsurance launch of note this year.

In parallel, Oak Reinsurance – led by former RenaissanceRe European CUO Cathal Carr – is gearing up to make its mark.

Based in London and underwriting through Lloyd's Syndicate 2843, Oak Re received approval to begin underwriting from 1 January 2025. With projected gross written premiums of $300mn for its inaugural year, Oak Re is backed by prominent capital providers, including Bain Capital and Hampden Agencies.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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