Culpeper Capital Partners is looking to scale its casualty ILS presence as part of a broader move to grow the asset class over the coming years. Moving beyond its inaugural casualty sidecar with QBE Re, firm leaders revealed to Artemis that they are already building a 2026 pipeline that includes a whole-account retrocessional deal and a strategy to partner with up to five new cedants.
The George Street Re sidecar was backed by institutional investors Culpeper Capital Partners and Calidris Investment Partners.
Artemis recently spoke to David King, Founder and Managing Member, and Aaron Slan, Managing Director of Culpeper Capital Partners, who explained why they chose to back QBE Re’s casualty sidecar, as well as where the firm identifies potential future opportunities for further involvement in insurance-linked securities (ILS).
“QBE Re is a great first casualty ILS transaction for Culpeper for a number of reasons: First, they are a very high-quality counterparty with a casualty insurance underwriting track record spanning decades,” King told Artemis.
He continued: “Second, they were interested in doing a transaction for the right reasons, i.e. to manage capital (vs. risk) and are retaining a substantial portion of the subject business, aligning their interest with ours. Third, the transaction is a whole account quota share across all of QBE Re’s casualty business providing us access to an incredibly diversified, blue-chip portfolio of underlying cedents.”
Beyond just providing capital for the sidecar, we also asked the executives what Culpeper needed to do in order to gain the necessary support from investors.
“Given that the casualty ILS market is still in the early stages of gaining traction, there are almost no terms that are preordained and we were able to creatively work with the QBE Re team to find appropriate solutions that met both their and our needs. We also led the extensive due diligence effort and legal processes,” Slan said.
Moreover, King went on to highlight how important the alignment with the sidecar sponsor is when working on these types of ILS transactions.
“Alignment is absolutely key. We are looking to provide a capital solution to help cedents take advantage of opportunities they see in the market. We are not looking to take on specific risks that cedents would prefer to transfer, because of the quality of the business. Specifically, alignment is achieved with sufficient retention of the business by the cedent as well as through various structural elements,” King explained to Artemis.
In addition, Slan elaborated why casualty reinsurance portfolios are an attractive investment proposition in Culpeper’s view
“The combination of high levels of rate adequacy across many business lines, improved terms and interest rate levels, allows for attractive risk adjusted returns for investors without having to take undue risk on either the underwriting or investment side,” he said.
As reinsurance and insurance-linked securities continues to expand, Culpeper is looking to partner with at least three to five additional cedants this year, however the company hopes to expand beyond that in future years to come, King also explained.
Referring to conversations that Culpeper has been having across the sector, Slan observed that it is clear to the executives that there are many potential cedants and investors who are evaluating options to enter the casualty ILS space in the near future.
“Therefore, it is all about crafting transactions that are attractive for all parties and matching the right kind of funding source with the right kind of cedant. For example, we are currently working with a partner on a whole account retro transaction with the underlying business focused on MGAs and regional carriers vs. large national and international ones,” Slan continued to explain.
To conclude, King provided an outlook for the casualty ILS sector for 2026, and named the type of activity that Culpeper hopes to see within the marketplace this year.
“We would like to see the casualty/specialty ILS expand 3-5x in the coming few years, so that it is sufficiently established to remain relevant should market conditions become less favourable at some point.
“Given the much larger size of the casualty/specialty insurance SECTOR, we don’t see any reason why invested dollars should not exceed the CAT-ILS market at some point; even if there is a different investor base that needs to be built for this to happen,” King concluded.
Read all of our interviews with ILS market and reinsurance sector professionals here.
