SageSure takes stake in Bermuda ILS manager Pillar Capital

SageSure has made a strategic investment in Pillar Capital Management, a Bermuda-based ILS fund manager with more than $4 billion in institutional assets under management, Insurance Business America reported on 12 October.

Pillar will continue to operate independently, keep its Bermuda team and investment strategy unchanged, and its management will retain a substantial ownership stake, according to the report. Stephen Velotti, chief executive and chief investment officer, and chief operating officer Tara Railton remain in their roles.

SageSure funded the investment by expanding its existing debt facility with Ares Management, the same route it used for its January acquisition of Florida's Olympus MGA. That deal added around 130,000 policies and $700 million in gross written premium. The report does not specify the size of the stake or the price.

SageSure said the deal adds Pillar's reinsurance underwriting and institutional investor relationships to its platform, broadening its capabilities across the property catastrophe value chain. Pillar gains access to SageSure's risk-level insights, analytics and technology.

SageSure already sponsors catastrophe bonds for its programs. Taking a stake in an ILS manager goes a step further, the report notes, giving the managing general underwriter a position in a business that allocates institutional capital to reinsurance risk directly. The Jersey City-based managing general underwriter operates in 16 states, covers more than 970,000 policyholders and manages more than $3.2 billion of in-force premium, according to the company.

The report frames the investment as a move toward capacity stability. Managing general underwriters such as SageSure depend on carrier partners and reinsurance, and a sharp shift in reinsurance appetite after a major event can quickly reduce what they can write; linking SageSure's data to Pillar's investor relationships is an attempt to make that capital more reliable. The report does not describe any commitment by Pillar to direct capital into SageSure's programs, and it describes Pillar's investment strategy as unchanged.