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News & Information

Clear Blue gets $42mn Pine Brook funds to fuel growth

David Bull, 10 September 2017 for The Insurance Insider

Program fronting specialist Clear Blue is set to bulk up its surplus in preparation for further growth as it closes in on a number of new deals expected during the last few months of the year, The Insurance Insider can reveal.

The company is understood to be adding $42mn of funds from the $250mn commitment made by New York private equity backer Pine Brook with the extra capital expected to be in place by the end of this month.

Clear Blue president Jerome Breslin confirmed the move and told this publication that the capital injection would take the AM Best A- rated company to a financial size category of 8. AM Best places insurers in the class if they have an adjusted policyholder surplus of between $100mn and $250mn.

The additional funding will give the Charlotte, North Carolina-based company headroom to continue its expansion without creating stress on its underwriting leverage ratios.

Clear Blue has already signed up four new programs this year to add around $60mn of run-rate premium, with a further four deals expected to be completed by 31 December that will add a multiple of that to the top line.

"That's causing us to add capital to continue to fuel the growth engine," Breslin told The Insurance Insider.

Among the programs added so far this year are two deals with MGA Stratus Risk Underwriters to launch new offerings for airport property and hangar owners and lessors in Florida and Texas.

Sources said that Clear Blue, which specializes in acting as a program transformer for reinsurers, had tied up with Bermudian Qatar Re on at least one of the programs.

Clear Blue is now believed to have built a book that numbers programs in the high teens since its December 2015 launch.

The company is a 100 percent fronting carrier for traditional reinsurance markets, total return reinsurers and collateralised writers, as well as Lloyd's syndicates.

The firm also operates as a program manager, working with carrier partners to oversee MGA relationships. It also handles the claims side of the business in conjunction with third party administrators.

The company underwrites on admitted and non-admitted shells bought from RLI and Maiden, respectively.

It is understood to have signed up 13 A rated reinsurers to support its growing portfolio of programs.

Broking sources have suggested that the reinsurers include TransRe, Gen Re, MS Amlin, Tokio Millennium Re, Endurance, PartnerRe, Qatar Re, JRG Re, Beazley and Hiscox. BACK