Allied World sponsoring first cat bond, a $150m 2001 CAT Re deal


Allied World Assurance Company (AWAC), a global insurance and reinsurance company and part of the Fairfax Financial group, is set to sponsor its first ever catastrophe bond, with a $150 million targeted issuance of this new 2001 CAT Re Ltd. (Series 2020-1)  multi-peril transaction.

allied-world-assurance-logoAllied World is seeking retrocessional reinsurance style protection from its first catastrophe bond, with the transaction featuring an industry-loss trigger and covering perils in the United States and in Europe.

A new Bermuda based special purpose insurer (SPI) has been established for the cat bond issuance, with 2001 CAT Re Ltd. registered on the island recently.

2001 CAT Re Ltd. will issue a single tranche of Series 2020-1 notes that will be sold to investors and the proceeds used to collateralize the underlying reinsurance arrangements that will provide the coverage to Allied World and a range of its underwriting subsidiaries.

The currently targeted $150 million of Series 2020-1 Class A notes to be issued by 2001 CAT Re will provide Allied World and subsidiaries with a source of multi-year protection against losses from U.S named storm (including Puerto Rico and the US Virgin Islands), U.S. (including Puerto Rico and the US Virgin Islands) and Canada earthquake, U.S. severe thunderstorm and European windstorm risks

The coverage provided will be on an annual aggregate basis across three annual risk periods from January 1st 2021, while the notes can be triggered by qualifying industry loss events that breach predefined index trigger points.

PCS triggers are being used for the U.S. peril loss events, while PERILS AG will report on European windstorm loss events.

The $150 million of Series 2020-1 Class A notes to be issued by 2001 CAT Re Ltd. will have an initial expected loss of 5.4%, we’re told.

These notes will be offered to cat bond investors with coupon guidance in a range from 12% to 13%, we understand.

It’s encouraging to learn of another new catastrophe bond sponsor coming to market in 2020 and seeing value in tapping investor appetite for new issues at this time.

Given Allied World’s strong standing as a global re/insurer, the issuance is likely to be well-received.

We’ll update you as this new 2001 CAT Re Ltd. (Series 2020-1) catastrophe bond proceeds to market and you can read all about this and more than 700 other transactions in the Artemis Deal Directory.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.