March 4, 2024

Bermuda created two new mortgage insurer class companies, Monarch Point Re (ISAC) Ltd. and Monarch Point Re (ISA 2023) Ltd., both registered with the regulator in May.

bermuda satelliteThe two mortgage insurer entities appear to have ties to specialty insurance and reinsurer AXIS Capital, given some of the names associated with documents seen by Artemis.

However, we reached out to AXIS Capital, which declined to comment.

Monarch Point Re (ISAC) Ltd. is a separate account company, which means it has the ability to issue preferred shares, and has shown that it can trade substantially across different units.

We don’t have much information on Monarch Point Re (ISA 2023) Ltd., but it seems likely that it was built for a similar purpose.

Given that the pair of structures are licensed by the Bermuda Monetary Authority (BMA) to register as mortgage insurers, they will be able to carry out a variety of mortgage insurance or reinsurance transactions and thus provide a multi-purpose platform for entering into risk transfer arrangements, potentially attracting third-party investors support.

Monarch Point Re (ISAC) Ltd. has two directors citing possible ties to AXIS Capital, one of whom is Loic Granchamp, senior leader of AXIS Capital’s Insurance-Linked Securities (ILS) division, AXIS ILS is principal/responsibility for ILS Asset Strategy.

Granchamp is also vice-chairman of the board of AXIS total return reinsurer Harrington Re, a joint venture between AXIS and asset management giant Blackstone.

Harrington Re focuses on long-tail business categories. As AXIS has exited property catastrophe exposure and is refocusing its ILS market activity on casualty and special categories, Monarch Point Re mortgage insurer may approach this segment of the business if the link to AXIS proves accurate stand up.

Another director with ties to AXIS is Ben Rubin, formerly global head of venture finance at AXIS Capital but since 2021 managing director of private equity specialist Stone Point Capital.

Rubin’s listing as a director may be a legacy of his previous role at AXIS. Of course, the new mortgage insurer’s name, “Monarch Point,” could also suggest something more popular.

Whether or not AXIS is involved, as the use of this structure continues to expand, it is good to see two more companies in the mortgage insurer category set up in Bermuda.

Bermuda’s regulator, the Bermuda Monetary Authority (BMA), developed the limited purpose insurance company (LPI) mortgage insurance and reinsurance categories in response to the increasing complexity and scope of the insurance-linked securities (ILS) market.

It provides a structure that can be used for multi-transaction purposes, underwriting mortgage reinsurance, retrocession and other forms of ILS transactions, simultaneously handling multiple sources of capital and the ability to segregate units or transactions from each other.

Secured insurers can also play against many types of counterparties, giving their sponsors a lot of flexibility.

An ILS structure can enter into a wider range of cedents and transaction types than the more common but more limited use cases of special purpose insurer (SPI) vehicles.

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