Mereo secures a balance-sheet rating exceeding $700 million and allocates $250 million in ILS fund capacity on January 1st.

Mereo Insurance, a Bermuda-based startup chaired by former AIG CEO Brian Duperreault, has successfully completed a capital raise exceeding $700 million for its equity balance sheet. The company has also secured an ‘A-‘ rating from AM Best and deployed approximately $250 million in capacity from its insurance-linked securities (ILS) fund during the January reinsurance renewals.

Adopting a balance-sheet agnostic approach, Mereo strategically integrates institutional investor capital within ILS structures alongside its equity to pursue insurance and reinsurance opportunities. The Mereo ILS fund aims to compound investor returns while mitigating risk by focusing on direct insurance, reinsurance, retrocession, catastrophe bonds, and off-market investments.

Mereo’s strategy seeks to align traditional and alternative reinsurance approaches to enhance capital efficiency and optimize investor returns. With its balance sheet now exceeding $700 million in equity and benefiting from internal fronting leverage, the company leverages multi-capital sources to strengthen the connection between risk capital and risk cedents.

While AM Best initially granted Mereo a preliminary credit rating in January 2024, the company officially launched underwriting capacity through its ILS fund at the January 2025 renewals. AM Best highlighted Mereo’s “very strong” balance sheet and projected rapid premium growth in its early years.

Viewing current reinsurance market conditions as both cyclically and structurally attractive, Mereo aims to unlock the full potential of reinsurance-linked investments through its Mereo ILS division. The Mereo ILS Opportunities Fund, an open-ended and diversified fund, has already deployed $250 million into property catastrophe reinsurance and retrocession at recent renewals, with additional committed capital set for April and mid-year deployments.

Mereo is also launching a Mereo Diversified ILS strategy, allowing investors to allocate capital to a quota share of the balance-sheet company. Key investors in Mereo’s equity balance-sheet fundraising include Susquehanna International Group (SIG), The Andover Companies, and Ares Management.

Chairman Brian Duperreault emphasized the unique opportunities in the current hard reinsurance market, stating that Mereo is well-positioned to meet rising demand while offering attractive risk-adjusted returns to investors. The company targets $520 million in premium writings in its first full underwriting year, focusing on a diversified mix of specialty, property, and casualty reinsurance.

CEO David Croom Johnson expressed enthusiasm about Mereo’s market entry, highlighting the opportunity to build a balanced and diverse portfolio across various reinsurance classes.

Industry partners and investors, including Ares Management and The Andover Companies, have expressed confidence in Mereo’s leadership and strategy. Neil Strong, previously with IQUW ILS Ltd and Securis Investment Partners, leads Mereo’s ILS management division.

By combining a rated Bermuda-based equity balance sheet with its ILS fund, Mereo offers complementary solutions that cater to growing risk transfer needs while delivering strong investor returns. The company’s journey to operational launch was supported by advisors such as Guy Carpenter, Willkie Farr, Lockton Re, BMS Group, Kinmont Advisory, Price Forbes Re, and Appleby.