In the wake of the 2005 Atlantic hurricane season’s record-setting catastrophic loss year and in response to the increased demand of capital adequacy and requirements, sidecars gained popularity in the (re)insurance market as an important strategic tool. They have since transitioned from an instrument created to cope with the impact of large-scale catastrophic losses, to an efficient quota-share capacity instrument used by (re)insurers to leverage their relationships with capital markets.
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