N※N

Collateralized reinsurer Fergus Re hires Stewart Ritchie as CEO - Artemis.bm

  //business-finance.news-articles.net/content/202 .. -re-hires-stewart-ritchie-as-ceo-artemis-bm.html
  Published in Business and Finance on Wednesday, October 1st 2025 at 6:31 GMT by Artemis
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Fergus RE Unveils Collateral‑Backed Reinsurance Solution Under New Leadership

In a move that could reshape the way mid‑market insurers manage risk, the newly christened Fergus RE announced the launch of a collateralised reinsurance platform. The company, which has been led from day one by Stewart Ritchie, has positioned itself as a boutique provider of “credit‑enhanced” reinsurance solutions, promising clients faster settlement, improved capital efficiency, and a higher degree of protection against counter‑party defaults.

From Inception to Launch

Fergus RE was founded in 2024 by a small but experienced group of former reinsurers who recognised that the industry’s traditional “pure” reinsurance contracts were becoming increasingly expensive and opaque. The firm’s vision was simple: create a reinsurance product that leveraged collateral in the same way banks use it to mitigate credit risk. The concept had been discussed in industry forums for years, but the company’s founding board and the appointment of Stewart Ritchie as CEO turned the idea from theory into practice.

Ritchie, a former senior executive at a major global reinsurer, brought with him a deep knowledge of both regulatory frameworks and client needs. “Collateralised reinsurance isn’t just about protecting the reinsurer; it’s about giving the ceding company a transparent, credit‑worthy partner,” he told reporters at the launch event. His leadership has been instrumental in attracting early adopters from the commercial insurance sector, especially those serving high‑risk industries such as energy, marine, and construction.

What is Collateralised Reinsurance?

The core of Fergus RE’s offering is the use of tangible or liquid collateral—such as cash, securities, or high‑quality assets—to back the reinsurer’s commitments. The collateral is held in a dedicated account and is available for immediate use should the reinsurer be unable to fulfil its obligations. In practice, this means:

• Reduced counter‑party risk: The ceding insurer is protected against potential defaults by the reinsurer.
• Lower capital charges: Regulators allow for reduced capital requirements when collateral is posted, benefiting both parties.
• Speedier claims settlement: Collateral can be used to pay claims quickly, improving the insurer’s experience and client relationships.

Fergus RE’s model also integrates an automated risk‑monitoring system that continuously evaluates the collateral’s quality and adequacy. Should the collateral value fall below a threshold, the system automatically notifies both parties, triggering a replenishment process.

Strategic Advantages for Clients

Mid‑market insurers—those writing under $100 million in premiums—often struggle to find affordable reinsurance that meets regulatory capital constraints. Fergus RE’s solution addresses several pain points:

1. Cost Efficiency: By reducing capital buffers, insurers can free up capital for growth initiatives. The company’s pricing model, as highlighted in the press release, offers competitive premiums compared to traditional pure reinsurance contracts.

2. Flexibility: Clients can choose the type of collateral they wish to use, allowing them to leverage existing asset holdings or to liquidate marketable securities as needed. This flexibility is especially useful for insurers with fluctuating risk profiles.

3. Transparency: The collateral ledger is accessible via a secure portal, giving clients real‑time visibility into their collateral status. This transparency helps mitigate the “black‑box” criticism that often plagues reinsurance agreements.

The company has already secured agreements with three mid‑market carriers that operate in the Caribbean and Latin America—regions where insurance penetration remains low but growth is accelerating. These pilots will serve as case studies for wider adoption across the region.

Regulatory and Market Context

The launch came at a time when regulators are tightening capital requirements for insurers. The Bermuda Monetary Authority (BMA), which oversees Fergus RE, has been promoting innovative products that improve risk management. In a statement, the BMA highlighted that Fergus RE’s collateralised approach aligns with its objectives of fostering a resilient insurance ecosystem.

Internationally, the reinsurance sector has seen a surge in “collateralised” instruments, including collateralised catastrophe bonds and reinsurance-linked securities. However, these instruments are often complex and geared towards institutional investors. Fergus RE’s proposition differentiates itself by focusing on the mid‑market segment and by offering a more straightforward, client‑friendly framework.

Challenges and Outlook

While the benefits are clear, the model is not without challenges. Securing high‑quality collateral can be difficult for insurers operating in emerging markets, where asset classes are less liquid. Fergus RE has addressed this by offering a “collateral optimisation” service that assists clients in identifying the most valuable assets for posting.

Another potential hurdle is the perception of the reinsurance market’s appetite for collateralised contracts. Some senior risk managers are wary of over‑reliance on collateral, fearing that market shocks could render the collateral worthless. Fergus RE’s real‑time monitoring and automatic replenishment safeguards aim to alleviate such concerns.

Looking ahead, Stewart Ritchie expressed optimism about expanding the product line. “Our next step is to explore tailored collateralised solutions for niche lines like cyber and climate‑related risks,” he said. He also hinted at potential collaborations with reinsurers in the U.S. and Europe, which could broaden the platform’s reach and diversify its collateral pool.

Conclusion

Fergus RE’s launch of a collateralised reinsurance platform represents a noteworthy development in the insurance‑reinsurance ecosystem. By marrying traditional risk transfer with modern collateral management, the company offers a compelling alternative for mid‑market insurers seeking cost‑effective, transparent, and capital‑efficient solutions. With Stewart Ritchie steering the firm’s strategic vision and a clear roadmap for expansion, Fergus RE is poised to become a significant player in the next wave of reinsurance innovation.