Swiss Re Insurance-Linked Fund Management

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Artex private cat bond vehicle completes $50.26m issuance


Private catastrophe bond issuance continues apace in time for the January 2020 reinsurance renewals, with a new $50.26 million cat bond lite issuance taking the 2019 total for these more privately placed deals just over $900 million, according to Artemis data.

artex-logoA $50.26 million Artex SAC Limited – Series IX Notes private catastrophe bond transaction has been issued by the Artex Risk Solutions owned segregated account reinsurance transformer platform Artex SAC Limited.

This is the first private catastrophe bond issued in 2019 under the Artex SAC Limited series of transactions.

This private cat bond issuance (or cat bond lite) has been completed and listed in Bermuda using the vehicles Artex SAC Limited Note Program II.

This transaction is the sixth we’ve listed in our Directory from the Artex owned segregated account company issuer and features $50.255 million of Artex SAC Limited – Series IX Notes, with the notes due April 7th 2022.

As ever, we assume these private cat bond notes feature property catastrophe risks, probably representing a securitisation of either an indemnity or industry loss triggered collateralised reinsurance or retrocession transaction.

The transaction will have been securitised to make the investment compatible with certain ILS fund or investor mandates, offering the investors an option for secondary liquidity as well.

This Series IX transaction consists of $50.225 million of notes that were issued using the Artex SAC Limited vehicle and its ILS Note Program II, on behalf of an IX Notes segregated account of the structure.

The notes have been placed with qualified investors and listed on the Bermuda Stock Exchange (BSX) as insurance related securities.

Typically these private cat bond transactions from the Artex platform involve peak property catastrophe reinsurance perils (normally U.S. focused), with a cedent and investor opting to use a private ILS structure to securitise the risks into investable form, and usually feature triggers based either on an industry loss or an indemnity structure basis.

These private cat bond issuance platforms, like the Artex SAC vehicle, provide an efficient way for cedants and investors to achieve the risk transfer and securitisation of the resulting investment.

Private cat bond, or cat bond lite, issuance activity continues to play an important role in the insurance-linked securities (ILS) market, helping ceding companies access the capital markets and cat bond investors or funds access reinsurance related securitised risks.

In 2019 we now have just under $904 million of private cat bonds listed in our comprehensive catastrophe bond and related insurance-linked securities Deal Directory.

2019’s almost $904 million of private cat bonds came from 29 individual transactions so far. That compares to 2018’s $902.5 million from 26 transactions and 2017’s $1.05 billion of private cat bond issuance from 28 deals.

We’ve added this new Artex SAC Limited – Series IX Notes private cat bond to our Deal Directory which contains details of every catastrophe bond issued to date.

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