Capital Management
Sidecar
Definition
A special purpose vehicle that allows third-party investors to participate in an insurer or reinsurer's business. Provides additional capacity for specific risks or time periods.
Practical Example
Reinsurer launching $200M sidecar to access capital markets for CAT business.
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Related Terms
Capital Management
Special Purpose Vehicle
Legal entity created specifically to issue insurance-linked securities or provide collateralized reinsurance.
Capital Management
Alternative Capital
Non-traditional reinsurance capacity from capital markets, pension funds, and hedge funds through ILS and other structures.