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AlphaCat private cat bond features LatAm risk from Terra Brasis Re


The $5 million Alpha Terra Validus I private catastrophe bond transaction, completed recently by AlphaCat Managers Ltd. the third-party reinsurance capital unit of Validus, features Latin American risks from cedent Terra Brasis Resseguros S.A. (Terra Brasis Re).

This is the first catastrophe bond to feature risks from Latin America, that we’re aware of, which is a significant step for the insurance-linked securities (ILS) market into a region which remains largely dominated by traditional reinsurance capital.

We wrote about the Alpha Terra Validus I private cat bond yesterday here, explaining that the transaction had been issued through the Aon Insurance Managers owned White Rock Insurance (SAC) Ltd. Class 3, Class C and segregated accounts reinsurance company.

Now, AlphaCat has issued a release explaining more about the transaction and revealing the cedent or sponsor, Terra Brasis Re the Brazilian based reinsurer that underwrites both treaty and facultative reinsurance across the Latin American region.

AlphaCat said that the transaction represents a “unique offering of Latin American reinsurance risk.”

The Alpha Terra Validus I private cat bond is structured on an indemnity trigger basis, AlphaCat explained and is the first cat bond ever sponsored by a Brazilian company.

Lixin Zeng, CEO of AlphaCat Managers, commented; “We are pleased to have partnered with Terra Brasis Re in bringing this innovative transaction to market and look forward to working together in the future.”

Rodrigo Botti, Director at Terra Brasis Re, added; “The partnership with AlphaCat will significantly contribute to the development of the Latin American insurance and reinsurance markets, as it brings capital markets based solutions to the region’s exposures.”

Seeing the first catastrophe bond to be sponsored by a Latin American reinsurers and featuring Latin American reinsurance risks is an encouraging step for the ILS market, as it is only through education and steady engagement that comfort and understanding of ILS and catastrophe bonds will be gained in the region.

This groundbreaking private cat bond deal will help to promote the catastrophe bond and third-party reinsurance capital in general in Latin America and will help to stimulate demand from local companies for contacts, more information and access to ILS.

We’ve updated the Alpha Terra Validus I private catastrophe bond entry in the Artemis Deal Directory to include the additional information disclosed.

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