TIH and Starwind Launch Fractal Re Ltd. With $270mm of Capital Raised

October 3, 2024 - Starwind Specialty Insurance Services, LLC (“Starwind”), a subsidiary of TIH, announced today it has partnered with Stone Point Credit to launch Fractal Re Ltd. (“Fractal Re”), a newly created collateralized reinsurer that will provide reinsurance capacity across Starwind’s diversified portfolio of casualty programs.

The launch was accompanied by a capital raise of $270 million of equity, with participation from leading institutional and industry investors including minority investments from Nationwide, Enstar Group as well as the TIH investor group and the Starwind management team. State National, in an expansion of its strategic partnership with Starwind, will serve as the platform’s fronting carrier.

Fractal Re will participate in a diversified portfolio of casualty and specialty risks underwritten by Starwind, a leading casualty MGA platform focused on underwriting and distributing niche and exclusive insurance products with over $3 billion in gross premiums written annually. The multi-year reinsurance agreement is effective October 1, 2024. The launch of Fractal Re reflects investors’ desire to partner with best-in-class underwriting teams and Starwind’s continued commitment to better serve its customers and distribution partners by expanding its capacity through third-party capital.

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

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

“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,” said Bill Goldstein, CEO of TIH Underwriting.

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.” added Jim Carey, Co-CEO of Stone Point.

Advisors

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

About Starwind

Starwind Specialty Insurance Services, LLC is one of the largest program management operations in North America, providing distribution partners and insureds unique, specialty products across multiple industries with a full suite of services - underwriting, distribution, and claims management.

About TIH

TIH, LLC (“TIH”) places over $50 billion of premiums and is the seventh largest insurance broker in the U.S. Headquartered in Charlotte, N.C., TIH operates more than 200 offices and has more than 10,000 employees across its portfolio of wholesale, retail, underwriting and insurance services businesses.

About Stone Point

Stone Point Capital is an alternative investment firm based in Greenwich, CT, with more than $50 billion of assets under management. Stone Point Capital targets investments in companies in the global financial services industry and related sectors. The firm invests in alternative asset classes, including private equity through its flagship Trident Funds and credit through commingled funds and separately managed accounts. In addition, Stone Point Capital Markets supports our firm, portfolio companies and other clients by providing dedicated financing solutions. For more information, please visit www.stonepoint.com.

Stone Point Credit is the credit-investing platform established by Stone Point Capital, with more than $8.5 billion of assets under management. Stone Point Credit manages a range of private and liquid credit strategies, with a focus on investments in the financial services, business services, software and technology, and healthcare services sectors. Stone Point Credit seeks to leverage the broader firm’s deep industry knowledge and extensive network to originate, underwrite and execute transactions.

About State National Companies

State National Companies, Inc. is a leading specialty provider of property and casualty insurance services operating in two niche markets across the U.S. In its Lender Services segment, the company specializes in providing portfolio protection solutions that insure autos, mortgages, and other collateral for loans made by credit unions, banks, and specialty finance companies. In its Program Services segment, the company leverages its ”A” (Excellent) A.M. Best rating, expansive licenses, and trusted reputation to provide access to the U.S. property and casualty insurance market in exchange for ceding fees. State National Companies is a division of Markel, a Fortune 500 holding company for insurance, reinsurance, and investment operations.