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$18.3m Asagao II private cat bond issued by Aon’s White Rock


A new approximately $18.3 million Asagao II Japanese private catastrophe bond transaction has come to market using the Aon Insurance Managers operated segregated accounts company White Rock Insurance SAC.

aon-white-rockThe transaction is the second Asagao private catastrophe bond to be issued using insurance and reinsurance broker Aon’s Bermuda domiciled Class 3 and Class C insurer and segregated accounts company, White Rock Insurance (SAC) Ltd.

Managed and facilitated by Aon Insurance Managers, the White Rock Insurance (SAC) Ltd. vehicle provides a transformation and securitisation platform for privately placed catastrophe bonds and collateralised reinsurance arrangements, as well as other captive and segregated account type services for re/insurers and cedents.

The first Asagao private cat bond came to market in September 2019, featuring a roughly $70 million securitisation of Japanese earthquake risks on a parametric trigger basis.

This new Asagao II private cat bond transaction has been completed recently and features an approximately $18.3 million (JPY 2 billion) securitisation of catastrophe risks.

We assume that again this Asagao II private cat bond features Japanese earthquake risks on a parametric basis, likely for the same unknown Japanese sponsor, although we cannot be certain at this time.

This looks like it may be an extension of the reinsurance coverage provided under the first Asagao transaction.

Aon Insurance Managers will again have played the role of the managing company for this Asagao II private cat bond issuance, facilitating by using its vehicle to issue a new private insurance-linked securities (ILS) deal (or private catastrophe bond) for an unknown Japanese catastrophe risk exposed cedent.

White Rock Insurance (SAC) Ltd. has issued ¥ 2 billion (JPY) of Principal At-Risk notes (roughly US $18.3m), acting on behalf of its segregated account named T71-Asagao II (which we’ve shortened to just Asagao II for our Deal Directory).

This transaction was issued under the established White Rock Insurance (SAC) Ltd. ILS Note Program, which enables the issuance of privately issued and placed cat bonds or other ILS arrangements.

The $18.3 million of Asagao II Principal At-Risk Notes are scheduled for maturity on May 5th 2021, slightly before the scheduled maturity date of the first Asagao deal which is on July 23rd 2021.

The Asagao II notes have been placed with qualified institutional investors, likely to have been an insurance-linked securities (ILS) fund or a number of ILS funds if the transaction was syndicated.

We assume that like the first deal, the Asagao II notes provide reinsurance or retrocessional coverage for Japanese earthquake losses to an unnamed cedent.

We assume the coverage to be on a parametric trigger basis, like the first Asagao cat bond.

As a privately structured, issued and placed catastrophe bond, details are typically scarce with this Asagao II issuance.

You can read all about this Asagao II private ILS arrangement and every other catastrophe bond transaction in the Artemis Deal Directory.

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