A $50.25 million private catastrophe bond transaction has been issued around the July renewal by broker Aon’s private catastrophe bond issuance and placement platform Randolph Re.
This is the first transaction to have come to light from Aon’s Randolph Re platform and likely saw the broker helping a cedent to access sources of capital markets backed reinsurance or retrocession through a securitised offering.
Aon launched the Randolph Re private cat bond platform in late 2019, as a dedicated platform from which private ILS transactions of $25 million in issuance size and above could be executed in a streamlined manner.
Private placement cat bonds placed using Randolph Re are issued through Aon’s special purpose vehicle White Rock Insurance (SAC) Bermuda Ltd, with its insurance management unit Aon Insurance Managers servicing the transactions.
A new principle at-risk variable rate notes program has been created to house the transactions, named the Randolph Re Program.
For this first issuance to come to light, Aon’s White Rock Insurance (SAC) Ltd., acting on behalf of its segregated account Randolph Re 2020-XX and under the Randolph Re Program, has issued $50.25 million of Series 2020-1 notes.
The insurance-linked notes issued are due July 6th 2021, so presumably represent a one-year fully collateralised reinsurance or retrocession agreement that has been securitised for a cedent.
As is typical with private cat bond transactions, we assume the notes will feature a cession of property catastrophe risks to capital market investors, typically dedicated insurance-linked securities (ILS) funds or specialist asset managers with a dedicated cat bond focused strategy.
These kinds of arrangements are typically syndicated across a number of ILS funds or investors, with Aon Securities acting as the bookrunner as well as having structured the transaction.
We have no visibility of other transactional details at this time, such as trigger, form of coverage etc.
The $50.25 million of notes issued under the Randolph Re Program and the program itself have both been admitted to the Bermuda Stock Exchange (BSX) for listing.
With Randolph Re, Aon hoped to encourage a wider range of cedents to the ILS market, making catastrophe bond backed reinsurance capacity simpler and more efficient to access.
We’ve listed this new $50.25 million Randolph Re (Series 2020-1) private catastrophe bond in the Artemis Deal Directory and where possible it will be included in all of our catastrophe bond and ILS market statistics.