By David Bull

April 22 - (The Insurer) - Ryan Specialty is set to go out into the market with Deutsche Bank as it seeks to bring in investors to support a new sidecar it is setting up with Axis Capital’s Lloyd’s platform to write a quota share of the business written by its MGU arm globally.

Senior market sources familiar with the situation told The Insurer the vehicle is being set up to write around a 10% quota share of business written by MGUs across all geographies and products on the Chicago-based company’s Ryan Specialty Underwriting Management (RSUM) platform.

Although the exact structure being proposed could not be immediately confirmed, the sidecar is expected to sit alongside the Lloyd’s AM Best A-plus rated paper of Bermudian (re)insurer Axis, which operates through its managed Syndicate 1686.

Ryan Specialty, Axis and Deutsche Bank declined to comment on this article.

Sources said that Axis would retain a portion of the business on its Lloyd’s platform, before ceding out to the new vehicle, which would look to take a 10% slice across the RSUM book.

Targeted premium volume could not be confirmed, but RSUM writes in excess of $5 billion in annual P&C premiums across its 30-plus MGUs and a national program division covering multiple niches.

This would suggest premium volume could be as high as $500 million annually.

Fundraising is aiming at a target of $300 million-plus from institutional and other investors including private equity to capitalize the sidecar.

Investors in the vehicle would be able to access a diversified book of business across the platform, including property, casualty, professional and management liability, and specialty lines.

The pitch to investors would also likely highlight the underwriting acumen of a blue chip carrier such as Axis along with its willingness to spearhead the initiative and retain a share of the business as an endorsement of the book that would be supported by the sidecar.

In addition to building a significant number of de novo MGUs since launching its underwriting platform, Ryan Specialty has been highly active in M&A over the last 18 months with a series of delegated authority acquisitions in the U.S. and UK.

RSUM, which is led by Miles Wuller, has had a strong focus on building strategic capacity relationships in recent years. Notable external partnerships have included Aspen supporting a swathe of its portfolio and its Geneva Re joint venture with Nationwide that was launched in 2019.

The attempt by Ryan Specialty to set up the sidecar is the latest example of wholesalers bringing in strategic third-party capital to support their underwriting platforms.

Earlier this month, The Insurer’s sister publication E&S Insurer first reported that Amwins had successfully set up an excess casualty sidecar with MSIG paper through its Special Risks Underwriting $(SRU.SI)$ inhouse MGA, allowing its brokers to access exclusive capacity.

In October last year, Program Manager broke the news that CRC’s Starwind Specialty Insurance Services had raised $270 million from investors including Nationwide and Enstar for a Bermuda sidecar-style reinsurer called Fractal Re to write a 15% to 20% quota share across 35-plus programs on its underwriting platform.

It is also the latest example of Lloyd’s looking to encourage new forms of capital into the market via innovative structures.

Other recent examples include the launch of Syndicate 2478 by AIG with third-party capital funding from Blackstone to take a share of its reinsurance placements, using Lloyd’s innovative London Bridge 2 PCC structure.