Ariel Re aims for growth with increased support from Berkshire Hathaway
Ariel Re, the international reinsurance company headquartered in Bermuda, has announced an increased engagement of Warren Buffett’s giant conglomerate, Berkshire Hathaway, with an investment and quota deal that is expected to drive growth.
Ariel Re was removed from former owner Argo Group in a late 2020 transaction involving leading private investors Pelican Ventures and JC Flowers.
The reinsurance company had previously entered into a strategic agreement with Berkshire Hathaway Inc.’s wholly owned subsidiary, National Indemnity Company (NICO), but it has now been extended to support continued expansion and growth.
Ariel Re has entered into two transactions with NICO of Berkshire Hathaway, an investment in newly issued Ariel Re convertible notes and an extension of NICO’s subscription commitment to the Ariel Re 1910 syndicate, through an agreement of multi-year quota share reinsurance.
This provides both working capital and reinsurance fund, helping Ariel Re to strengthen its strategic importance in the global reinsurance market and strengthen its profile with major clients.
“This long-term strategic partnership with the Berkshire Hathaway reinsurance division will add tremendous value to Ariel Re and our ability to continue to invest, innovate and improve our clients’ solutions and services,” explained Jim Stanard, Chairman of Ariel Re. “We anticipate that Berkshire Hathaway will be our long-term strategic partner as we develop and expand Ariel Re’s underwriting capacity with other high-quality long-term partners. “
Eric Rahe, Managing Director and Co-Chairman of JC Flowers & Co., also said: “We are extremely pleased that a partner of the caliber and insight of Berkshire Hathaway reinsurance endorses the Ariel Re team.
“We have appreciated the opportunity to work with the Berkshire Hathaway reinsurance team over the past year as a key partner and provider of capital,” said Ryan Mather, CEO of Ariel Re. “Their insights on global macroeconomic trends and creative solutions have been invaluable to us and we look forward to working with them for years to come. “
Ariel Re is well known for leveraging external sources of capital and capacity, including its work with third party reinsurance capital that supports its underwriting, as well as its growing use of catastrophe bonds for retrocessional support.
The addition of a major capital partner to Berkshire Hathaway adds weight and leverage to the company, which will assist it in its pursuit of its mission of becoming a leading reinsurance provider.