Vermeer Re’s balance sheet hits $1.3 billion as PGGM/PFZW increases investment

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Vermeer Reinsurance Ltd., the joint venture and rated underwriting vehicle that is managed by RenaissanceRe and capitalized by Netherlands-based pension investor PGGM, expanded its balance sheet to $1.3 billion in 2021, the investor having added a small amount to his commitment during the year on behalf of the Dutch pension PFZW.

In 2021, Stichting Pensioenfonds Zorg en Welzijn (PFZW), the Dutch health and welfare pension fund that is Vermeer’s end investor, subscribed for an additional $50 million of participating common stock without Vermeer’s voting rights.

This is just over the $45 million underwritten in 2020 and shows that PFZW is keen to continue to grow Vermeer, to match the growing market opportunity, especially in a firming environment.

Vermeer Reinsurance Ltd. (Vermeer Re) was launched in time for the January 2019 reinsurance renewals, as RenaissanceRe (RenRe) partnered with long-time institutional insurance-related securities (ILS) investor PGGM to launch the first company managed and rated “A”. reinsurance vehicle for a single pension fund investor.

Vermeer Re started life with an initial capitalization of $600 million, which pension investment manager PGGM arranged on behalf of one of the pensions it administers, the Dutch health sector pension PFZW and social protection.

PFZW retains all economic interests in Vermeer Reinsurance Ltd., following which capital increases allocated since have helped grow the reinsurance vehicle, allowing it to underwrite more risk each year and capitalize on improving conditions of the reinsurance market.

PFZW, through PGGM, added $355 million of additional capital to Vermeer Re in 2019, which, along with retained earnings, increased Vermeer Re’s balance sheet to approximately $1 billion at the start of 2020.

Then another $45 million of equity was subscribed by the retirement investor in 2020, followed by this final injection of another $50 million of capital in 2021.

The result is that Vermeer Re’s balance sheet stood at about $1.3 billion at the end of December 2021, an increase of about $200 million since the end of 2020, thanks to retained earnings and additional shares subscribed.

Vermeer Re’s liabilities also doubled in 2021, to nearly $70 million at year-end, likely reflecting a tougher underwriting environment as well as loss activity.

Vermeer’s losses approached $11.4 million in 2020, but for 2021 the joint venture reinsurance vehicle saw lower underwriting income, which we believe was due to the experience of related losses. to disasters.

Winter Storm Uri and Hurricane Ida both resulted in losses that affected Vermeer in 2021, as well as other smaller weather events or disasters.

RenaissanceRe said just over $32.8 million of its significant weather-related losses in 2021 were attributable to noncontrolling interests in Vermeer Reinsurance.

This is a relatively low level of loss for these major industry catastrophic events, against which some $408 million was attributable to non-controlling interests in the DaVinci Re vehicle, showing the low volatility strategy of Vermeer.

Income attributable to non-controlling interests at Vermeer was $38.2 million for the year, compared to $61 million in 2020, as the effects of loss activity weighed on company returns. pension investor who supports the reinsurer.

It is assumed that profits will have been held back again in 2021, allowing for further steady growth for the reinsurer as Vermeer Re develops its portfolio and strategy, while the pension investor behind it has increased its commitment a bit again.

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