First catastrophe bond expands investor base for Inigo: Alvarez

The successful completion of its first catastrophe bond has helped London headquartered and Lloyd’s market focused specialty insurance and reinsurance underwriter Inigo Insurance expand its alternative capital and ILS investor base, Adam Alvarez has said.

Inigo recently successfully sponsored its first catastrophe bond, with the Montoya Re Ltd. (Series 2022-1) multi-peril deal settling to secure it $115 million in capital markets backed reinsurance protection.

Inigo’s debut catastrophe bond provides its Lloyd’s syndicate 1301 with almost three years of annual aggregate retrocessional reinsurance protection, to the end of March 2025, covering it against certain losses from multiple international peak perils of U.S. named storm, U.S. and Canada earthquake, Japan earthquake, and Japan typhoon, based on a PCS industry loss index trigger.

Adam Alvarez, Head of Insight at Inigo, commented on the completion of the cat bond, “Inigo has made extensive use of alternative sources of reinsurance capital since our inception. By transferring part of our risk to capital markets as a catastrophe bond, we have further expanded the investor base that is able to access our portfolio of insurance and reinsurance.”

By tapping the capital markets through different structures, Inigo can access a more diverse investor base, with the cat bond segment of the investor market able to provide a reliable source of multi-year protection.

The company had already been utilising collateralised capacity from the capital markets for its reinsurance protection, but the cat bond structure will have provided diversification among its capital sources, as well as the chance to lock-in ILW-style protection.

As we explained before, the Montoya Re cat bond priced at the top-end of guidance for Inigo, but the company is pleased that the multi-year coverage locks in a valuable source of protection for it.

“We are pleased to have locked in such a significant part of our hedging strategy for three years during a turbulent time in the markets. By further strengthening our own capital position, we have ensured that we will be able to grow with our clients and offer them the security that they need to manage their most complex risks,” Alvarez added.

Inigo aims to nearly double its gross premiums written to over $850 million for 2022, suggesting the firms use of capital markets backed reinsurance will likely expand alongside this.

YYou can read all about this new Montoya Re Ltd. (Series 2022-1) catastrophe bond, the first from Inigo Insurance and every other cat bond issued in our extensive Artemis Deal Directory.