A potentially $1 billion reinsurance company has been unveiled by RenaissanceRe Holdings Ltd and major pension fund manager PGGM, of the Netherlands.

The new company is called Vermeer Reinsurance Ltd has approval in principle to be licensed and regulated by the Bermuda Monetary Authority as a Class 3B reinsurer.

Vermeer has received an “A” financial strength rating from AM Best. It will provide capacity focused on “risk remote layers” in the US property catastrophe market, and be managed by Renaissance Underwriting Managers, Ltd.

PGGM is a Dutch pension fund service provider with €215 billion of assets under management. It has a 13-year track record of investing in insurance and is one of the largest end-investors in the ILS asset class.

Vermeer will be initially capitalised with $600 million of equity from PGGM, with up to a further $400 million available to pursue growth opportunities in 2019, for a total of $1 billion of capital. PGGM is the sole investor in Vermeer.

Aditya Dutt, president of Renaissance Underwriting Managers, said: “We are proud to partner with a respected global leader in PGGM to create Vermeer. This continues RenaissanceRe’s 20-year track record of creating and managing joint ventures that match well-underwritten portfolios of risk to diverse sources of capital. We continue to be a pioneer in this area and are pleased to bring our excellent service and deep expertise in underwriting, modelling and claims to address the risk challenges of our clients.”

Eveline Takken-Somers, senior director, credit and insurance linked investments of PGGM, said: “Since 2014, we have focused on building strategic partnerships with top tier reinsurance companies to improve access to and selection of risk. We seek efficient implementation of our investments as we believe this leads to superior returns.

“RenaissanceRe is a world leader in both reinsurance and the creation of joint venture vehicles and we look forward to the opportunities Vermeer will provide as PGGM continues to grow its insurance portfolio.”