Inigo Insurance, the London headquartered and Lloyd’s market focused specialty insurance and reinsurance underwriter, has entered the catastrophe bond market for the first time, seeking $105 million or more in coverage from a Montoya Re Ltd. (Series 2022-1) issuance.
Inigo Insurance was launched at the end of 2020, gaining $800 million of funding from a range of pension, sovereign wealth and private equity investors and launching its Syndicate 1301 at Lloyd’s.
Writing property catastrophe reinsurance and property insurance, the carrier has clearly been picking up sufficient peak peril exposure to find the catastrophe bond market an attractive source of reinsurance or retrocession for its syndicate, as this first cat bond from the company demonstrates.
Sources told Artemis that Inigo Insurance has registered a special purpose insurer in Bermuda named Montoya Re Ltd. for the purpose of issuing catastrophe bonds.
For its first issuance, Montoya Re Ltd. is seeking to issue and sell to investors a $105 million or larger tranche of Series 2022-1 Class A notes.
The collateral from the sale of the notes will underpin retro reinsurance agreements between the SPI Montoya Re and Inigo’s Syndicate 1301 at Lloyd’s, we understand, with the syndicate the ultimate beneficiary of the coverage.
We’re told that the $105 million or larger tranche of Series 2022-1 Class A notes issued by Montoya Re Ltd. are designed to provide Inigo’s syndicate 1301 with roughly three years of protection to the end of March 2025.
The coverage will be across the peak perils of U.S. named storm, U.S. and Canada earthquake, Japan earthquake, and Japan typhoon.
The cat bond will feature a PCS industry loss index trigger, with coverage on an annual aggregate basis, we’re told.
The Class A notes come with an initial attachment probability of 3.37%, an initial expected loss of 1.52% and are being marketed to investors with coupon price guidance in a range from 5.5% to 6.25%, we understand.
It’s encouraging to see another of the recent market entrants looking to the catastrophe bond market for reinsurance as it grows.
Cat bonds are offering well-defined and priced industry loss based protection right now, which can be a valuable protection and capital lever for an expansive newcomer, particularly in a hardening catastrophe reinsurance and property insurance marketplace.