Verdant Rock Limited, a Bermuda-based Class 3B insurer and financial guarantor, has closed a 30% quota share reinsurance treaty with a panel of global reinsurers carrying an average financial strength rating of A+ from either AM Best or S&P. The move, announced less than a year after the company received its Class 3B insurance license from the Bermuda Monetary Authority, marks a significant step in strengthening the security behind its financial guarantees and expanding its capacity to underwrite emerging market risks.
The treaty covers Verdant Rock's portfolio of irrevocable, unconditional and on-demand financial guarantees on private corporate, structured and project finance exposures across emerging markets. By ceding 30% of risk to highly rated reinsurers, Verdant Rock enhances its balance sheet, diversifies its capital base, and improves scalability for future growth. This matters because each guarantee the company issues now benefits from an additional layer of security provided by counterparties with strong credit ratings, potentially making the guarantees more attractive to banks, insurers, and institutional investors seeking eligible credit protection under Basel and major insurance solvency regimes.
Tolga Uzuner, Co-Founder and Chief Executive Officer of Verdant Rock, said, "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. 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 underscores the growing role of private financial guarantors in bridging credit gaps in emerging markets. Verdant Rock 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. The company currently holds a BBB+ Long-Term Insurer Financial Strength Rating with a Stable Outlook from Fitch Ratings.
By sharing risk with A+ rated reinsurers, Verdant Rock not only reinforces its own creditworthiness but also contributes to the overall stability of emerging market finance. This treaty could enable the company to take on larger or more numerous guarantees than it could on its own, thereby unlocking capacity for future growth. For investors and lenders operating in emerging markets, the added reinsurance layer may reduce perceived risk and encourage more private capital flows into these regions.
The 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. 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.
