Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Alpha Terra Validus III bond shows ILS established in Latin America


The successful completion of the third private catastrophe bond transaction between AIG owned fund manager AlphaCat Managers, Ltd. and reinsurer Terra Brasis Resseguros S.A. demonstrates that ILS has become established in the Latin American region, the pair said.

alphacat-managers-logoThe two firms successfully completed the third issuance of the $5 million private catastrophe bond transaction recently, resulting in the Alpha Terra Validus III transaction.

The pair called this a “pioneering arrangement” for the insurance-linked securities (ILS) market, providing Brazilian headquartered reinsurer Terra Brasis Re with coverage for Latin American catastrophe reinsurance risks.

The $5 million of notes offer the reinsurer a capital market investor backed source of retrocessional reinsurance protection for its property catastrophe exposures, including multi-country earthquake risks in the Latin America region.

Using an indemnity trigger, the private cat bond would pay out based on losses to Terra Brasis Re’s covered portfolio during the year term of the transaction.

The $5 million of notes were placed with AlphaCat investors, providing them with a useful source of diversification into a region whose risks are not typically as widely accessible through ILS structures.

“In 2017 we forged new ground alongside Terra Brasis, bringing ILS into Latin America. Extending our partnership in 2018 and again in 2019 demonstrates ILS is established in the region,” Lixin Zeng, Chief Executive Officer of AlphaCat commented on the transaction.

Rodrigo Botti, Chief Executive Officer of Terra Brasis Re, added, “We are pleased to continue to count AlphaCat as a close partner. Insurance penetration in Latin America has been historically low. Fostering ILS technology in the region will be an important tool to close this protection gap.”

You can read all about the $5 million Alpha Terra Validus III private catastrophe bond in the Artemis Deal Directory and the details we have are included in our catastrophe bond and ILS market statistics.

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.