Hamilton launches Ada Capital for high-return collateralized retro focus

Hamilton, the Bermuda based insurance and reinsurance holding company, has formally launched its Ada Capital Management platform and Ada Re underwriting vehicle for its awaited entry into the collateralized retrocession space.

As we explained before, Hamilton’s ambitions to capitalise on the dislocated retrocession market were already clear, with the launch of Ada Capital Management Limited as a retro focused collateralized underwriting agent and manager well-known.

Now the company has formally launched its retro venture, saying that Ada Capital Management will target “high-return collateralized retrocessional reinsurance” and that it has already secured investor commitments for the new unit.

Ada Capital Management Limited is a Bermuda-regulated insurance agent and will underwrite on behalf of Ada Re Ltd., a recently registered Bermuda special purpose insurer (SPI).

Ada Re has already secured capital commitments, Hamilton explained today and, subject to the necessary regulatory approvals, will “provide capacity for high-return collateralized retrocessional reinsurance contracts on a market-facing basis.”

Tony Ursano, Group CFO and Head of Strategic Partnerships at Hamilton, commented on the launch, “We are delighted to have successfully established and secured funding for Ada Re, which is another step forward in our ambition to build a leading third-party capital management and ILS franchise over time.

“Ada Re will give investors immediate access to the improving pricing, terms and conditions, and expected returns in the retro market. The establishment of Ada Re is indicative of our ability to quickly capitalize on dynamic reinsurance market conditions for the benefit of third-party capital investors.”

Ada Re is expected to benefit from having full access to Hamilton’s broad company-wide underwriting expertise, including its proprietary portfolio management and pricing system, Hamilton Analytics & Risk Platform (HARP).

Ada Capital will operate in addition to Hamilton’s own existing collateralized reinsurance sidecar Turing Re and is also in addition to the other third-party capital initiatives within the Hamilton ILS platform.

Ada Capital will utilise the portfolio management expertise and leadership of SVP, Strategic Partnerships Hanni Ali, who will work closely alongside Hamilton Re, Ltd. Reinsurance CUO Tim Duffin and Hamilton Re, Ltd. SVP, Head of Property Reinsurance Susan Steinhoff as the retro portfolio is created.

Ada Capital is the first confirmed capital raise with a specific focus on the collateralized retrocessional reinsurance segment of the market announced in time for 2021.

With that segment of the market still expected to face capacity challenges, the additional capital deployed by Ada Capital should be easily absorbed by and will be welcomed by retro reinsurance buyers, given the size of that market has shrunk over the last couple of years.