Ariel Re opts to use London Bridge 2 PCC for new Titania Re cat bond sponsorship

Ariel Re has returned to the catastrophe bond market initially seeking $125 million of US multi-peril retrocession, but for the first time the reinsurer is using the Lloyd’s insurance-linked securities structure for this London Bridge 2 PCC Limited (Titania Re 2026-1) issuance, Artemis can report.

Global reinsurance company Ariel Re has previously sponsored five catastrophe bonds, all of which were issued using its Bermuda based special purpose insurer Titania Re Ltd.

This new issuance will become the sixth catastrophe bond to take a Titania Re name.

But in a notable shift, Ariel Re has opted to utilise a UK based special purpose reinsurance vehicle this time, the Lloyd’s of London sponsored vehicle London Bridge 2 PCC Limited.

Ariel Re sponsors its cat bonds with its Syndicate 1910 at Lloyd’s the named ceding entity and beneficiary of the coverage, so it perhaps makes sense and might prove efficient for the reinsurer to switch to the UK based and Lloyd’s-linked issuing structure.

It’s also worth noting that Ariel Re is very familiar with the SPRV, having previously utilised the London Bridge ILS structure for a capital raise for itself in 2023 and to fund its third-party capital unit Ariel Re Capital Partners in 2025.

This will become the sixth catastrophe bond sponsored by Ariel Re since 2021, its last being a $150 million issuance in July 2025.

Read about all of Ariel Re’s catastrophe bonds by filtering our Deal Directory by sponsor.

So, in this case the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited will issue the notes and connect the capital from investors to Ariel Re’s business via retro reinsurance agreements.

London Bridge 2 PCC Limited is offering investors two tranches of Series 2026-1 notes, via two protected cells named Titania Re 2026-1 Class A and Titania Re 2026-1 Class B, sources told us.

The Titania Re Series 2026-1 notes will be sold to cat bond investors and the proceeds used to collateralize reinsurance agreements between the protected cells of London Bridge 2 PCC and Ariel Re’s Syndicate 1910, affording the reinsurer a source of multi-year US focused property catastrophe retrocession.

We understand this Titania Re 2026-1 issuance from London Bridge 2 PCC will ultimately provide Ariel Re’s Syndicate 1910 with a roughly three year source of fully-collateralized retrocession covering losses from US named storms, earthquakes and wildfire events.

Notably, this is now the second Titania Re cat bond in a row to include the wildfire peril, after it was first introduced to Ariel Re’s cat bonds in the 2025 issuance.

The $125 million of Titania Re 2026-1 notes being offered across the two tranches will provide Ariel Re’s Syndicate 1910 with retro protection on an industry-loss index trigger and annual aggregate basis, we understand.

The protection will run across three annual risk periods until April 2029, while we’re told there will be a franchise deductible of $125 million for each named storm or earthquake event, and $240 million for each wildfire loss.

A $75 million tranche of Titania Re 2026-1 Class A notes will have an initial attachment point at $2 billion of losses, with exhaustion set at $2.4 billion, giving them an initial attachment probability of 3.64%, an initial base expected loss of 3.08% and they are being offered to cat bond investors with price guidance in a range from 6.75% to 7.5%, sources have told us.

A $50 million tranche of Titania Re 2026-1 Class B notes are riskier, having an initial attachment point at $1.2 billion of losses, with exhaustion set at $1.6 billion, giving them an initial attachment probability of 8.41%, an initial base expected loss of 6.7% and they are being offered to cat bond investors with price guidance in a range from 14.5% to 15.5%, it is said.

Ariel Re continues to build-out its sources of catastrophe bond market backed retrocession with this new offering, focusing on adding further annual aggregate buffers for its peak peril exposures in the United States.

It is interesting to see the shift to using a UK based SPRV as the issuing structure. But more interesting over the longer-term will be seeing whether Ariel Re sticks with that choice going forwards.

You can read all about this new London Bridge 2 PCC Limited (Titania Re 2026-1) catastrophe bond from Ariel Re, as well as details on over 1,000 other cat bond transactions in the extensive Artemis Deal Directory.