Listen to this articleBelow is our recent interview with Peter McKelvy and Anthony McKelvy, Co-Founders and Managing Partners of Northern Re.
Q: Could you provide our readers with a brief introduction to Northern Re?
A: The world of reinsurance dates back to 14th century Belgium. Shipping routes that were battered by bad weather or menaced by pirates were reinsured to defray some of the risk inherent to shipping cargo. A lot of innovation has happened in the intervening 650 years but the premise behind reinsurance as a risk transfer mechanism has endured. We are excited to have built a company that offers a modern version of this financial product, and made it accessible to private capital.
Q: Who is your ideal customer and why?
A: Our customers are highly rated insurance companies. We provide them balance sheet relief by assuming a portion of the liabilities associated with the underlying policies that they’ve sold. In exchange for this risk transfer Northern Re collects the premiums associated with those policies. Our customers often view us as a preferred partner due to our capital position and modern infrastructure. In a business like ours stability, reliability, and predictability are key.
Q: Can you tell us more about your solutions?
A: Northern Re provides collateral to traditional insurance companies in order to secure every reinsurance transaction. Said differently, we insure the insurers.
Q: What can we expect from Northern Re in the next 6 months? What are your plans?
A: Our company is growing and we anticipate making some exciting personnel announcements. It’s a great time to be in our space right now and we are in the process of deploying $75M in capital we raised in 2023 and achieving risk-adjusted returns beyond what we had originally anticipated. We are consistently taking in data from all manner of sources and informing our predictive models. While we’ll continue to do that, we are monitoring many of the market movements we see today such as the significant rise in insurance rates since the start of the pandemic.
Q: What is the best thing about Northern Re that people might not know about?
A: We are proud to offer an innovation to a concept that was invented and has endured since the Middle Ages. At Northern Re we have modernized reinsurance, particularly for underserved market participants. We carry neither the capital structure or overhead costs of a typical reinsurer. As the world goes through rapid cultural and societal shifts, we have the agility to identify, deploy capital, and compete in reinsurance markets. Our capital structure and superior predictive modeling has the potential to make a difference in the lives of consumers and the companies that provide them insurance products.
