Aviation start-up Itasca Re launches in Bermuda

Castlelake has announced the creation of a Bermuda-licensed reinsurance company, Itasca Re Limited, to offer insurance financing solutions to buyers and owners of commercial aircraft assets.

The solutions offered by Itasca Re are designed to attempt to enable competitive financing rates for aircraft asset buyers by transferring the non-payment risk traditionally held by financiers to third parties via an insurance policy issued by Starr Insurance Companies, which is reinsured by Itasca Re and other potential third-party reinsurers pursuant to a dedicated reinsurance agreement.

Itasca Re will be led by aviation industry veteran Kostya Zolotusky, who most recently led the Integrated Finance Linked Insurance (IFLI) division of Piiq Risk Partners, an insurance broker focused on the aviation sector associated with The Ardonagh Group.

Piiq will provide exclusive brokerage services to Starr and Itasca Re.

“Itasca Re is the latest step Castlelake has taken to strategically innovate and expand the financing solutions it can offer,” said Joe McConnell, partner and deputy co-chief Investment Officer at Castlelake.

“Itasca Re brings reinsurance support for creative, customisable and cost-efficient insurance-backed products to our airline partners and other buyers and owners of commercial aircraft assets at what we see as a time of high need.”

The start-up reinsurer is expected to provide a broad spectrum of insurance-backed risk solutions in the aviation finance sector, including servicing airlines and operating lessors seeking to purchase or refinance new or vintage aircraft assets as well as financiers seeking alternative syndication or de-risking options for their loan portfolios.

Itasca Re’s dedicated focus on aircraft secured financing and its team’s experience is expected to enable more nuanced asset-secured insurance financing solutions than what has been available in the current insurance market. 

Castlelake has been a strategic partner and active capital provider to aviation asset owners and lessees since its inception, having invested over $17 billion in aviation opportunities, acquired more than 650 aircraft and developed relationships with approximately 200 airlines.