Verdant Rock Limited, a Bermuda-based Class 3B insurer and financial guarantor focused on emerging markets, has closed a 30% quota share reinsurance treaty with a panel of leading global reinsurers. The panel carries an average financial strength rating of A+ from either AM Best or S&P, according to the company's announcement. The treaty marks a significant milestone for Verdant Rock, coming less than a year after it received its Class 3B insurance license from the Bermuda Monetary Authority.
The reinsurance treaty supports Verdant Rock's portfolio of irrevocable, unconditional and on-demand financial guarantees on private corporate, structured and project finance exposures across emerging markets. By sharing 30% of risk with highly rated capacity providers, Verdant Rock aims to further strengthen its balance sheet, diversify its capital base and enhance scalability for future growth.
"Securing a reinsurance panel of this caliber, rated A+ on average, at this stage of our development is a strong validation of our underwriting framework and our approach to governance," said Tolga Uzuner, Co-Founder and Chief Executive Officer of Verdant Rock Limited. "Every guarantee Verdant Rock issues now carries an additional layer of security from counterparties that have spent time understanding and believing in what we are building. We are grateful to each panel member for their confidence in us."
The announcement carries implications for the emerging market financial guarantee sector. Verdant Rock provides Basel and ICS-family Solvency regimes compliant, investment-grade financial guarantees on private credit exposures in emerging markets, designed to qualify as eligible credit protection under Basel and major insurance solvency regimes for banks, insurers and institutional investors globally. The company focuses on private liabilities and does not cover sovereigns, municipalities or provinces. Its remit includes bonds and loans issued by emerging market corporations and banks, structured financings, asset-backed (ABS) and mortgage-backed (MBS) exposures in securities or loan format, and project finance.
By securing reinsurance from a panel with an average A+ rating, Verdant Rock enhances the security behind each guarantee it issues. This additional layer of security may make its guarantees more attractive to institutional investors and lenders seeking eligible credit protection, potentially expanding the availability of credit in emerging markets. The treaty also unlocks capacity for future growth, allowing Verdant Rock to take on more exposures without proportionally increasing its capital requirements.
The company currently holds a BBB+ Long-Term Insurer Financial Strength Rating with a Stable Outlook from Fitch Ratings. The new reinsurance treaty with A+ rated counterparties could positively influence future rating assessments, as it demonstrates access to high-quality reinsurance capacity and effective risk management.
For banks, insurers, and institutional investors operating in emerging markets, the strengthened guarantee capacity may provide additional comfort in managing credit risk. The ability to obtain eligible credit protection under Basel and insurance solvency regimes is crucial for capital relief, and Verdant Rock's expanded capacity could facilitate more efficient capital allocation.
The move also signals confidence in Verdant Rock's underwriting framework and governance from established global reinsurers. As the company scales, this partnership may serve as a foundation for further growth and potential additional reinsurance arrangements.
Verdant Rock's announcement is for information only and not an offer or solicitation to buy or sell any security, insurance product, or financial guarantee. Forward-looking statements are not guarantees of future results, and the company undertakes no obligation to update them. A credit rating is not a recommendation to buy, sell or hold any security and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency. For more information, visit Verdant Rock's website.
