Starwind partners with Stone Point to launch collateralized reinsurer Fractal Re

TIH subsidiary, Starwind Specialty Insurance Services, LLC, in partnership with Stone Point Credit, has launched Fractal Re Ltd., a new collateralized reinsurer with $270 million of raised capital, designed to provide capacity across Starwind’s diversified portfolio of casualty programs.

Leading institutional and industry investors, including minority investments from Nationwide, Enstar Group, the TIH investor group, and the Starwind management team, participated in the capital raise.

It’s been revealed that State National is set to expand its strategic partnership with Starwind, serving as the platform’s fronting carrier.

Fractal Re will participate in a diversified portfolio of casualty and specialty risks underwritten by casualty MGA, Starwind, via a multi-year reinsurance agreement, effective October 1st, 2024.

As part of the transaction, a subsidiary of Enstar has agreed to provide sidecar investors with an option to obtain finality through a novation transaction after a certain time. Enstar has developed the FEO (Forward Exit Option) solution specifically tailored to provide finality to third-party insurance-linked securities investors.

Stone Point Credit will serve as the investment manager to Fractal Re, and will target a diversified portfolio of credit strategies designed to match the vehicle’s liability profile.

J.P. Morgan Securities LLC acted as the sole placement agent, while BMS Capital Advisory, Inc. acted as the financial advisor on the transaction. Willkie Farr & Gallagher LLP provided legal counsel.

Bill Goldstein, Chief Executive Officer (CEO), TIH Underwriting, commented, “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.”

Matt Freeman, CEO of State National, added, “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.”

“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,” concluded Jim Carey, Co-CEO of Stone Point.

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