In 1993, Warburg Pincus led a group of investors that founded RenaissanceRe, a Bermuda-based startup writing property catastrophe reinsurance in the U.S. and abroad. In the aftermath of Hurricane Andrew, a $16 billion loss event, there was an industry-wide withdrawal of capacity as reinsurers meaningfully reduced their participation in the market. This led to a substantial supply/demand imbalance and subsequent pricing increases in the catastrophe reinsurance market. Warburg Pincus’ investment thesis was predicated on backing a talented management team in a startup, to build a broad-based, offshore property reinsurer focused on underwriting excellence through technology and exceptional human capital. With Warburg Pincus’ support, RenaissanceRe became one of the largest underwriters of catastrophe reinsurance among its Bermuda peers and one of the most profitable reinsurers in the industry. RenaissanceRe successfully completed its IPO in July of 1995. Warburg Pincus remained an investor in the company for nearly seven years, due to its strong belief in RenaissanceRe’s value proposition. In 2000, Warburg Pincus fully exited its position in RenaissanceRe.
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