Everest Launches Reinsurance Sidecar with Stone Point in Bermuda
12h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
reinsuranceinsurance-linked-securities
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Everest Group Ltd. has partnered with private equity firm Stone Point Capital to establish a new casualty reinsurance sidecar domiciled in Bermuda. The transaction, announced on June 17, 2026, provides Everest with approximately $400 million in dedicated capital from institutional investors to underwrite excess-of-loss reinsurance on its casualty portfolio. This strategic move expands Everest’s underwriting capacity for long-tail liability risks amid a period of sustained premium rate increases.
The reinsurance market is experiencing a prolonged period of firming conditions, characterized by rising premiums and stricter terms. This hardening cycle began in earnest after the significant insured losses of the 2022 hurricane season, which exceeded $120 billion globally. Current market dynamics are fueled by inflation, climate-related volatility, and a retreat of traditional capital providers from peak catastrophe zones. Everest’s sidecar launch capitalizes on this environment by allowing third-party investors to gain direct exposure to the attractive returns of casualty reinsurance without establishing their own underwriting operations. The structure enables Everest to use Stone Point’s investor network to secure efficient capital that aligns with its strategic growth targets in a profitable segment.
The new sidecar, named Everest Reinsurance sidecar 2026 Ltd., has an initial capitalization target of $400 million. Everest will retain a minority economic interest in the vehicle and will act as the sole underwriter and manager. The capital will be deployed to support casualty treaties, which typically have longer durations than property catastrophe contracts. For comparison, rival reinsurer Arch Capital Group Ltd. launched a $300 million property catastrophe sidecar in the first quarter of 2025. The global insurance-linked securities (ILS) market reached a record $110 billion in outstanding capital at the end of 2025, demonstrating strong investor appetite. Everest’s premium volume for its casualty and professional liability lines grew by 9% year-over-year in its last quarterly report, outpacing the firm’s overall premium growth rate of 6.5%.
| Metric | Everest Sidecar | Industry Average (2025 ILS) |
|---|---|---|
| Capitalization | ~$400M | $250M - $500M |
| Focus | Casualty Reinsurance | Property Catastrophe |
| Sponsor Retention | Minority Stake | Typically 5-20% |
The sidecar transaction is a credit-positive development for Everest Group (EG) as it facilitates growth without straining its balance sheet. It signals strong institutional confidence in Everest’s underwriting expertise, potentially providing a modest tailwind to its share price relative to peers like Arch Capital (ACGL) and RenaissanceRe (RNR). The deal directs fresh capital specifically toward casualty lines, which may temper future rate increases in that segment. A key risk is the alignment of interests over the long term; sidecar investors may seek to redeem capital if returns disappoint, potentially creating volatility in Everest’s capacity. Hedge funds and pension funds represented by Stone Point are establishing long positions in ILS as an uncorrelated asset class, diverting flow from traditional fixed income. Reinsurance brokers Aon (AON) and Marsh McLennan (MMC) stand to benefit from increased transactional activity and complexity in the ILS market.
The sidecar’s initial underwriting performance will be closely monitored during the July 1, 2026, reinsurance renewal period, a key date for mid-year contract negotiations. Investors should watch for any follow-on sidecar launches from other major reinsurers like AXIS Capital (AXS) before the peak Atlantic hurricane season, which runs from August to October. A critical level to watch is the pricing for casualty reinsurance at the June and July renewals; sustained rate increases above 5% would validate the capital deployment. The next significant catalyst for Everest will be its Q2 2026 earnings release, scheduled for late July, which will provide the first official commentary on the sidecar’s integration and impact.
A reinsurance sidecar is a special-purpose vehicle that allows investors to provide capital directly to a reinsurer for a specific segment of its business. The sponsoring reinsurer, like Everest, manages the underwriting and earns fees, while the investors, like those from Stone Point, assume the risk and receive the profits. This structure provides the reinsurer with additional capacity without issuing debt or equity and gives investors pure-play exposure to insurance risk returns, which are largely uncorrelated with broader financial markets.
While both are insurance-linked securities, a sidecar is a privately negotiated quota-share agreement that typically covers a broader portfolio of risks, like Everest’s entire casualty book. A catastrophe bond is a publicly rated security that provides protection against a specific, predefined catastrophic event, such as a hurricane hitting Florida. Sidecars offer more flexibility and faster capital deployment but are less transparent and liquid for investors compared to cat bonds, which trade on a secondary market.
For equity investors in reinsurance companies, sidecar deals like Everest’s demonstrate management’s ability to attract third-party capital, which is a positive signal of underwriting discipline. It can lead to higher fee income and accelerated book value growth without significant balance sheet risk. However, investors should monitor the performance of these vehicles, as poor underwriting results can lead to reputational damage and a loss of future capacity, potentially impacting the stock’s valuation premium relative to book value.
Everest’s sidecar efficiently expands its capacity to capitalize on a profitable hardening market.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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