Argo Group International Holdings, Ltd. announced Monday that it establised a new sidecar reinsurer and separately announced that it issued $172 million in catastrophe bonds.

The sidecar, Harambee Re Limited (“Harambee Re”), for the 2014 accident year, continues Argo Group’s use of sidecar partners following the creation of Harambee Re 2013-1 Ltd covering the 2013 accident year.

“We are pleased to continue support of our business growth objectives through this vehicle, which is larger for 2014 than for 2013. Harambee Re enables us to increase our underwriting capacity for key business units without adding materially to the Argo Group’s overall exposure to volatility associated with catastrophe losses.”

As was the case in 2013, the Harambee Re sidecar will support two of Argo Group’s core business units and include both a reinsurance and an insurance portfolio.

Reinsurance through Harambee Re will cover specific property portfolios underwritten by Bermuda reinsurer Argo Re and Colony Specialty, Argo Group’s Excess and Surplus Lines segment.

In a statement, Argo Group President and Chief Executive Officer Mark E. Watson III said the 2014 sidecar, which is larger than the 2013 counterpart, supports growth—enabling Argo to increase underwriting capacity for key business units without adding materially to overall exposure associated with volatile catastrophe losses.

As for the catastrophe bonds, Argo said that a series of three bonds will provide $172 million of protection to its insurance and reinsurance subsidiaries through Loma Re Insurance (Bermuda) Ltd.

Coverage provided through the Loma bond program incepts Jan. 1, 2014, and runs for a period of four years, protecting Argo Group’s participating U.S. insurance units, Argo Re, and Lloyd’s Syndicate 1200 against U.S. hurricanes, earthquakes and convective storms and Canadian earthquakes.

The bond program has an annual aggregate loss calculation which combines an indemnity trigger mechanism for traditional insurance business with an index-based trigger mechanism for reinsurance business.

Source: Argo Group