Northern Re, based in New York City and the Cayman Islands, announced it has secured an additional $100 million in committed capital from a mix of new and existing institutional investors.
The new investment more than doubles the company’s total capitalization to $175 million and is intended to support Northern Re’s expansion in the casualty insurance-linked securities (ILS) sector.
Northern Re was established in 2022 as a collateralized reinsurer by brothers Anthony and Peter McKelvy. The company provides a platform for third-party capital to participate in the ILS market.
It initially launched with $25 million in capital from private investors. A subsequent fundraising round in November 2024 brought total capital investment to $75 million prior to the latest increase.
The company said the new capital will be used to strengthen both its unencumbered surplus and collateral positions, supporting growth while maintaining a focus on financial strength.
Northern Re structures its capital into two pools: a collateral pool that backs obligations and a surplus pool comprising unencumbered capital reserves. The company noted that it continues to post collateral exclusively in cash, rather than using letters of credit.
Anthony McKelvy (pictured above), co-founder and managing partner, said Northern Re is welcoming new investors with long-term perspectives on the casualty ILS market alongside its existing investor base.
With its expanded capital, Northern Re projects it will write more than $500 million in gross written premium (GWP) during 2025. The company plans to invest in a diversified portfolio of US and global carriers across casualty lines.
Northern Re has invested in building proprietary capital modeling and data infrastructure, which are integrated with its underwriting platform. The firm said this approach has enhanced operational efficiency while maintaining a lean staffing model.
Northern Re’s emphasis on casualty ILS solutions aligns with broader market trends, as carriers seek alternative capacity sources and reinsurance structures to optimize capital costs.
The overall ILS market reached a record capacity of $107 billion by year-end 2024, driven by retained earnings and new capital inflows. This expansion indicates a growing investor appetite for alternative risk transfer mechanisms beyond traditional property catastrophe bonds.
The year also saw the introduction of new perils into the ILS market, such as terrorism and cyber risks, suggesting a trend toward broader risk coverage. These developments point to an increasing interest in diversifying the types of risks securitized through ILS, potentially encompassing casualty lines.
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