Global reinsurer Ariel Re has announced the successful completion of its third catastrophe bond, Titania Re III, which provides it with $125 million of collateralized reinsurance cover for named storms and earthquakes.
The bond applies to these perils in all US States, Puerto Rico, the US Virgin Islands and Canada with an industry loss trigger over three years.
Additionally, the bond includes a feature whereby Ariel Re will seek to buy carbon offset options from a provider to generate carbon credits in the event of a significant hurricane or earthquake that requires a large number of homes, commercial properties and vehicles to be replaced.
There is no rule that requires replacements to have lower carbon emissions, so Ariel Re is using Titania Re III to buy carbon offsets equivalent to the benefit that would have come from rebuilding or replacing buildings and vehicles with those which have a less damaging carbon impact.
Titania Re III is the third cat bond which Ariel Re has sponsored since the initial Titania Re deal in 2021.
Further details on the full Titania Re series found in the Artemis Deal Directory, in addition to information on all other cat bond deals since the inception of the market.
“Ariel Re is extremely proud to have sponsored our third cat bond with a new feature relating to carbon offsets,” said Ariel Re CEO Ryan Mather.
“Our vision is to be the premier manager of reinsurance risk, and launching environmentally-friendly initiatives such as Titania Re III for the building back of business and communities in the wake of natural disasters shows that we can be innovative in the reinsurance solutions we provide to our clients,” he commented.
Matthew Twilley, Head of Ceded at Ariel Re, further stated: “While there is no directive to build back greener, Ariel Re is taking the initiative to help people and businesses to get back on their feet after natural disasters in a way that reduces the harm done to the planet. We want to do good while helping others to do well.”
Ariel Re reports that the Titania Re III cat bond was successfully closed on February 23, 2023, with Howden Tiger Capital Markets & Advisory acting as sole structuring agent and joint bookrunner, and Aon Securities LLC acting as joint bookrunner.
