Cayman Islands-based reinsurance company Northern Reinsurance SPC (Northern Re), has launched earlier this year.

Initially capitalised with $25m drawn from a private investment group, Northern Re supports a select group of portfolios that are known by the managing partners to be profitable.

Northern Re stated that this capital tranche comes as the first of several phase process via which the company will drive its growth.

The reinsurance company leverages its modern framework as well as sector knowledge to offer third-party capital the capability to take part in the insurance-linked securities (ILS) alternative asset class.

Northern Re co-founder Peter McKelvy said: “Diversification into alternatives is an important part of any family office or institutional strategy. In the past five years, the evolution of the traditional reinsurance market and standardization around casualty ILS has created an opportunity for private capital to generate returns superior to other low-beta assets on a risk-adjusted basis.”

The reinsurance company focuses on risks of high-frequency, low-severity nature but offer stable returns to capital partners.

It is claimed to have built huge regulatory and financial infrastructure to provide more customised solutions for both investors and counterparties.

Among the targeted lines of business that it provides include, but are not restricted to, personal and commercial auto, general liability, workers compensation, and other professional lines.

Northern Re stated that primarily its scope of opportunities would lie in the regional carrier and MGA/MGU markets where the reinsurance structure focuses on alignment of interest.

The company deploys a combination of analytics, underwriting, and actuarial expertise to address the requirements of its partners.

Northern Re co-founder Anthony McKelvy said: “We worked with many of the major fronting companies in the US during our development in order to create a structure that provides exceptional collateral and additional layers of financial security.

“Our team has a wealth of experience both in the industry and across verticals. We are excited to already be supporting several great partners throughout the market in Q1 and look forward to future trading relationships with historically strong companies”.

Operating under a B(iii) license secured from the Cayman Islands Monetary Authority, Northern Re was established by brothers Anthony, and Peter McKelvy.

Northern Re plans to bring further capital capacity online this year.