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XL, Stone Point set up new firm for reinsurance capital markets products

Global insurance and reinsurance company XL Group and private equity firm Stone Point Capital have launched a new Bermuda-based company, which will operate as an investment manager in insurance-linked securities (ILS) and other reinsurance capital markets products.

In the new joint venture (JV), whose name has not been announced, XL will own a 75% ownership stake and the remaining 25% ownership equity will be with Stone Point.

An aggregate of $135m in funds will be invested by the two companies in the JV, which will focus on ILS and index-linked products as well as on XL-designed reinsurance products.

The founder partners said that the new firm will deliver investors access to both reinsurance capital markets products as well as more traditional reinsurance opportunities, including certain risks currently written by XL.

Commenting on the launch of the new company, XL CEO Mike McGavick said that the launch of the new company fits completely with its continuing objective to cater innovative products to its clients and enhance profitability and long-term value for shareholders.

Stone Point CEO Charles Davis commented, "This initiative with XL is designed to offer third-party investors an opportunity to invest in this asset class in partnership with one of the world’s premiere reinsurance underwriters."

XL Group, through its subsidiaries, delivers property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises across the globe.