IQUW gets A-minus rating for Bermuda reinsurance platform after $170 million Hudson-led debt raise

By David Bull

March 21 - (The Insurer) - IQUW is set to grow its third-party reinsurance business in property, specialty and casualty lines through its Bermuda platform after raising $170 million of capital for the vehicle in a Hudson Structured-led debt issue and securing an A-minus rating from AM Best.

IQUW Re Bermuda was launched in 2021, initially writing a whole-account quota share of the Aquiline and Abry Partners-backed group’s Lloyd’s platform, which underwrites on Syndicates 1856 and 218.

In a statement on Friday, the company said that the fundraise means it now has over $1 billion of capital across the group, with the A-minus rating from AM Best “another milestone” in its evolution as it looks to expand its third-party reinsurance business from its Bermuda platform.

The senior debt issue was supported by funds and accounts managed by Michael Millette-led Hudson Structured Capital Management as HSCM Bermuda, along with investors associated with Kilter Finance.

Howden Capital Markets & Advisory were financial advisors to IQUW on the debt issue.

In a note confirming the assignment of the A-minus financial strength rating and "a-minus" issuer credit rating, with a stable outlook, AM Best said the ratings reflect IQUW Re's "strategic importance" to the group as well as the group's strong balance sheet strength.

Stephen Young, CEO of IQUW Bermuda, said: “Over the last three years, we have built an experienced team and embedded new operational capabilities in Bermuda from the ground up.

“This rating and Bermuda balance sheet will strengthen IQUW’s relevance in the market and support the next stage of IQUW’s growth strategy.”

He added that the A-minus rating will enhance the company’s ability to write third-party business from Bermuda, which will give it the flexibility to react to market conditions and expand in line with its risk appetite.

At the group level, IQUW said it posted record profit in 2024, writing $1.6 billion in gross written premium and a combined ratio of 83.1% from the Bermuda platform and Lloyd’s Syndicates 1856 and 218.

IQUW group CEO Peter Bilsby said: “Securing an A- AM Best rating is a significant endorsement of IQUW’s financial strength and our capability to support clients on a global scale.

“As a Bermuda based company, this rating allows us to expand alongside Lloyd’s. Our Bermudian platform is complementary to our Lloyd’s presence and will enable us to continue to responsibly grow the business through both locations.”

IQUW writes aviation, cyber, cargo, crisis management, marine, credit and political risk, energy, property, D&O, financial institutions, political violence, terror and war insurance risks, as well as reinsurance for property treaty international and U.S., and specialty through Lloyd’s Syndicate 1856.

Financials for IQUW Re Bermuda are not yet available for 2024, but for 2023, the company wrote a 65% whole account quota share of the Lloyd’s corporate member, with total premium written in the year of $684 million, according to the financial condition report filed by the vehicle with the island’s regulator.

The IQUW name was a rebrand of Arcus Syndicate 1856 and the specialty (re)insurance operations of ERS.

Abry and an Aquiline-led investor group participated in a $350 million capital raise in 2021 for the platform, which is led by former Talbot head Bilsby.