CRC’s Constellation Affiliated Partners (CAP) has teamed up with MultiStrat to bring $115mn of additional premium capacity to its State National-fronted Venture program for contractors’ general liability, some of the longest-tail business supported by ILS capital to date, Program Manager can reveal.


Napa-based Venture Underwriters was bought by CAP in 2020, before the Bill Goldstein-led firm was itself acquired by CRC Group last summer.

Venture Underwriters writes primary and excess national contractors’ general liability programs in all states except New York.

CAP and MultiStrat worked closely with BMS Re to bring the new ILS capacity to the primary general liability program.

Sources have said the long-tail nature of the underlying policies makes the transfer of the risk to the ILS market the first transaction of its kind, with the majority of capital markets participation to date aimed at shorter-tail casualty business with a typical duration of three to four years.


It is also the latest example of the growing investor interest in accessing P&C lines of business outside the property cat space, which has been the focus of the ILS market for much of the last 15 years.

That has led a number of players – including MultiStrat as well as Vesttoo, Ledger Investing and Longtail Re – to become increasingly visible and active in bringing capital markets capacity to casualty risk, particularly in the programs and MGA space.

The structure of the Venture Underwriters deal sees Markel-owned State National’s United Specialty carrier subsidiary issue paper to front the $115mn of MultiStrat quota share premium capacity.

MultiStrat Re Ltd in Bermuda acts as a quota share reinsurer of United Specialty through a segregated cell, with the capital markets investor supporting the capacity owning the preference shares in the segregated cell.

Sources said the unnamed capital markets investor is an active participant in the P&C sector.

Speaking to this publication, Bill Goldstein, CEO of CRC Group’s Specialty Programs division, said the deal was the first of what is expected to be a pipeline of transactions with ILS players including MultiStrat, which is led by Bob Forness as CEO.

“It was the outstanding work Bob and his team did that was able to transform the underlying traditional quota share participation into a separate vehicle that would be attractive to the investor community. It’s a great partnership and working relationship we have with MultiStrat,” he said.

Bermudian MultiStrat is majority-owned by Canopius Group and underwrites both prospective and retrospective casualty reinsurance sourced through intermediaries and places casualty ILS transactions with alternative investors.

Bill Goldstein PQ

Forness said the transaction had presented the challenges of structuring reinsurance that was competitive with traditional markets to meet the needs of Venture, while working with his firm’s capital markets team led by Jim Robinson to find a good investor fit and to be able to “translate the transaction into their language”.

MultiStrat’s operations team then assembled and executed the transaction and will operate and oversee the business over time, given its long-tail nature.

The executive highlighted the expertise of Venture Underwriters and its National Claim Services affiliate.

Bob Forness PQ

“We had extensive due diligence to perform on behalf of the investor and that all went very well. Innovation, hard work and great partners working together in a creative way has produced a fantastic outcome,” he said.

Data is key

Capital markets investors looking to get comfortable with long-tail risk need high quality data, and Forness said the MGU was able to meet those needs, while BMS delivered actuarial modelling and support to the process.

Goldstein highlighted the in-house claims capabilities at Venture Underwriters, and the extensive investments made across CAP and CRC’s Specialty Programs platform in data and technology.

“So we have best-in-class data and we also were able to leverage the in-house actuarial capabilities of BMS, which were fantastic, as well as their placement skills. Between MultiStrat and BMS there was a lot of hard work getting the diligence done.”

Pete Chandler PQ

BMS Re CEO Pete Chandler highlighted the groundbreaking nature of the transaction.

“Long-tail risk has been increasingly viewed as the next frontier for ILS capital. At BMS we are continuously looking to bring new sources, and forms, of capital and capacity to all of our clients and prospects; the MGA/program space is certainly no exception. This transaction combined a high level of creativity, expertise and innovation in a fantastic partnership for BMS Re with Constellation, State National and MultiStrat. This collaborative expertise was clearly made evident within the separate underwriting, claims and contract reviews by Multistrat and the underlying investor, ” he said.

Meanwhile, Goldstein said the role of State National had been critical to the transaction as he pointed to the fronting carrier’s flexibility.

“There was also a lot of creativity on the part of State National. They were a key component of this transaction and a real value-add in getting this done,” said the executive.

State National CEO Matt Freeman commented: “We believe casualty ILS has enormous potential and are delighted to have the opportunity to help craft a responsible and repeatable path to market that’s attractive to investors and accessible to the most sophisticated program administrators.”

Both CRC and MultiStrat made it clear that the addition of ILS capacity to the program was not viewed as a replacement for traditional reinsurance, but rather a complementary capital source to support the MGU.

Matt Freeman PQ

“This for us means access to new capital, and new growth capacity, in addition to our fantastic reinsurance partners. We look at the scale and breadth of our programs as a means of attracting potentially non-traditional reinsurance support through the ILS market,” Goldstein commented.

Forness added that capital markets investors also appreciate participating on reinsurance deals alongside traditional markets.

“It gives investors comfort that experienced markets are on the risk alongside them. We like to be able to bring meaningful scale to a program, but it’s best for us to do that alongside great traditional markets,” he said.