Inigo has completed its first catastrophe bond deal, a Montoya Re Series 2022-1 transaction through which it has secured peak catastrophe peril reinsurance capacity from capital market investors.
The cat bond was launched 1 April and is a $115m transaction covering earthquake and windstorm risk in the US, Canada, and Japan.
The risk period will be three years and the coupon is 6.75% above money market fund returns.
The bond was structured by Aon Securities and fronted by Hannover Re.
Adam Alvarez, head of insight at Inigo, said, “Inigo has made extensive use of alternative sources of reinsurance capital since our inception. By transferring part of our risk to capital markets as a catastrophe bond, we have further expanded the investor base that is able to access our portfolio of insurance and reinsurance.
For its first issuance, Montoya Re was seeking to issue and sell to investors a $105m or larger tranche of Series 2022-1 Class A notes.
The collateral from the sale of the notes will underpin retro reinsurance agreements between the SPI Montoya Re and Inigo’s Syndicate 1301 at Lloyd’s, with the syndicate the ultimate beneficiary of the coverage.
Alvarez added: “We are pleased to have locked in such a significant part of our hedging strategy for three years during a turbulent time in the markets. By further strengthening our own capital position, we have ensured that we will be able to grow with our clients and offer them the security that they need to manage their most complex risks.”
Inigo is focussed on 10 (re)insurance lines of business working exclusively through the broker intermediary market. Inigo is the lead underwriter for commercial and industrial companies across the globe and provides reinsurance capacity to the world’s leading insurers.
