Northern Re total capitalisation reaches $175m with latest $100m investment

Northern Re, a reinsurance firm focused on long-tail casualty business, has announced it has successfully secured an additional $100 million in committed capital.

This significant financial boost comes from a mix of both new and existing institutional investors, more than doubling the company’s total capitalisation to $175 million.

The substantial injection of funds positions Northern Re for a period of accelerated growth, particularly in the Casualty Insurance-Linked Securities (ILS) market.

The new funding will be deployed to strengthen both unencumbered surplus and collateral positions, enabling Northern Re to scale its operations while maintaining its dedication to financial strength.

Northern Re, employs a particular capital structure, bifurcating its resources into a collateral pool, which directly funds its obligations, and a surplus pool, which is unencumbered capital that sits in reserve.

Notably, the company remains committed to posting collateral in cash, without relying on letters of credit – a meaningful differentiator in the ILS industry.
Northern Re was set up in 2022 as a collateralised reinsurer by brothers Anthony and Peter McKelvy in the Cayman Islands. It enables third-party capital to participate in the ILS asset class.

The company launched with $25 million in capital which was committed by private investors as part of the first phase of fundraising. The Company then raised further capital in November of 2024, increasing the total capital investment to $75 million.

Commenting on the latest capital raise, Anthony McKelvy, co-Founder and Managing Partner of Northern Re, said: “This raise represents a strong vote of confidence in our business model and growth strategy.

“We’re particularly pleased to welcome new investors with long-term perspectives on the Casualty ILS market alongside our existing partners who continue to support our vision.”

With the expanded capital base, Northern Re anticipates writing over $500 million in gross written premium (GWP) throughout 2025. These investments will support a varied portfolio of US and international carriers within casualty lines.

Northern Re has significantly invested in its own capital modelling and data infrastructure since its inception, elements that are fully integrated with the company’s underwriting platform.

This holistic methodology has unlocked operational efficiencies as the company is focused on managing headcount in line with a modern approach.
“Our technology-driven approach to risk assessment and capital allocation represents a significant competitive advantage,” added Peter McKelvy, co-Founder and Managing Partner.

He continued: “These capabilities allow us to respond more effectively to market opportunities while maintaining disciplined underwriting standards across our growing portfolio. In addition, our sophisticated capital modelling is engrained in the underwriting process as we seek to deliver alpha for our investors and cedents through more efficient deployment.”

SOURCE: www.reinsurancene.ws/northern-re-total-capitalisation-reaches-175m-with-latest-100m-investment/