Ex-AIG Chief Secures $700 Million for Mereo Reinsurance Startup

Mereo Insurance, a Bermuda-based reinsurance startup, has secured a significant investment of over $700 million, led by prominent investors such as Susquehanna International Group (SIG), The Andover Companies, and Ares Management Alternative Credit funds. This substantial capitalization, announced in February 2025, positions Mereo to capitalize on the attractive market opportunity in reinsurance.

The company, co-founded by industry veteran and former AIG CEO Brian Duperreault, aims to launch its operations in early 2025, targeting the January 1 renewals. Mereo Insurance plans to underwrite a diversified reinsurance portfolio, with an equally weighted mix of specialty, property, and casualty lines. The company expects to write around $520 million of premium in its first full underwriting year.

Mereo's unique business model leverages managed institutional investor capital in ILS structures alongside its own equity, allowing it to scale quickly and offer flexible, scalable, and timely solutions to the reinsurance market. The company's ILS fund, Mereo ILS Opportunities Fund, has already deployed an initial limit of around $250 million in the 1.1 2025 property cat renewals, with additional funds available for deployment at the upcoming April and mid-year reinsurance renewals.

The company's strong backing and unique business model are expected to position it well to offer attractive returns to its investors while meeting the growing demand for reinsurance. AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of "a-" (Excellent) to Mereo Insurance Limited, reflecting the company's very strong balance sheet and stable outlook.

Mereo's strategic focus on underwriting, led by industry veteran Brian Duperreault, is expected to instill confidence in investors and clients alike. The company's balance-sheet agnostic approach to utilizing institutional investor capital in ILS structures alongside its own equity offers several advantages, such as scalability, diversification, and alignment of interests. However, it also presents challenges, including execution risk, regulatory compliance, and managing investor expectations.

In conclusion, Mereo Insurance's $700 million initial capitalization, led by prominent investors, positions the company to capitalize on the attractive market opportunity in reinsurance. With a unique business model and strong backing, Mereo is well-positioned to offer flexible, scalable, and timely solutions to the reinsurance market while generating attractive returns for its investors.