Novacore has launched a collateralized reinsurance sidecar backed by New Mountain Capital, marking the specialty MGA's push into the reinsurance carrier space as the broader sector faces growing scrutiny over its rapid expansion.
The vehicle, called NovaRe, will sit within a newly established entity called VictoryRe. New Mountain, a New York-based firm managing approximately $60 billion in assets, has described the investment as the product of a long-standing focus on insurance services.
Novacore itself was formed last year after New Mountain acquired NSM Insurance Group's US commercial insurance division, which managed more than $2 billion in premium across 30-plus niche programs.
A reinsurance sidecar allows outside capital to participate in underwriting risk through a fully collateralized vehicle, without standing up a full carrier.
NovaRe is structured to provide multi-year premium capacity on a risk-attaching basis across Novacore's property and casualty portfolio, which spans more than 15 segments including coastal condominiums, trucking, professional liability and workers' compensation.
AM Best has estimated the broader reinsurance sidecar market at between $16 billion and $18 billion, a 183% increase since 2023. Guy Carpenter has noted that a key driver of growth has been MGAs seeking greater access to stable capacity.
The launch comes as the MGA segment faces mounting questions over scale and risk concentration. Morningstar DBRS reported that MGA-sourced premiums reached $90.4 billion in 2024, having expanded 90% over five years, while a Deloitte analysis found that private equity firms now own more than 30% of US MGA entities.
Fronting carriers dedicated to MGA business wrote roughly $29.1 billion in direct premiums in 2024, with the 10 largest accounting for approximately 69% of that volume.
Morningstar DBRS also flagged that state regulators have conducted targeted examinations of fronting carriers with significant delegated underwriting exposure, adding pressure on MGAs to secure alternative capacity sources.
Aaron Miller (pictured above), CEO of Novacore, called NovaRe "a natural extension of our underwriting-first philosophy," adding that New Mountain's backing allows the firm to expand capacity behind programs with consistent performance and strong controls.
Chase Clark, Novacore's chief operating and underwriting officer, said profitability remains the platform's primary focus. "This initiative strengthens our ability to support carrier partners with capital-efficient growth while maintaining the same rigorous standards that define the Novacore brand," Clark said.
Robert Mulcare, managing director at New Mountain, described the structure as reflecting "our shared commitment to responsible growth, disciplined risk management and sustainable value creation."
Novacore has positioned VictoryRe as a long-term platform, with plans to build a diversified, multi-line reinsurance operation.
