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LGT collaborates on recent private catastrophe bond transaction


According to a recently published update LGT Insurance-Linked Strategies, the insurance-linked securities and reinsurance-linked investment manager, has participated in another private catastrophe bond transaction. The transaction appears to have been completed recently and LGT participated as the sole investor.

The LGT ILS team has a track record of participating in and facilitating private cat bond deals, having worked on what they term “Cat Bond Lite” structures with an issue volume of over $120m in the past, some of which had been transacted while the team were at their previous home at Clariden Leu.

The latest update from LGT Insurance-Linked Strategies says that the investment manager has recently collaborated with a counterparty on the issuance of a private catastrophe bond transaction. No details are revealed on the counterparty, the name of the issuing entity, the perils involved, the size or the structure and trigger used.

The update says that LGT acted as the sole investor, on behalf of its various ILS funds and investment mandates, on this private cat bond deal for the counterparty.

We reached out to LGT to see if we could glean any further details but were told that ‘LGT does not comment on private transactions or disclose specific information on such deals.’

Now, this is particularly interesting as we wrote just two weeks ago about a private catastrophe bond transaction which had been structured for a single investor counterparty. Quoting from our recent article; ‘the underlying investment mandate required access to the risk in an instrument which could potentially be liquid if needed.’

That was a private cat bond from Bermuda reinsurer RenaissanceRe, which saw the reinsurer cede catastrophe risk to a single investor through a private insurance-linked security transaction for the first time.

We’re going to go out on a limb here and suggest that it is possible, or perhaps even likely, that the LGT ILS team was the sole investor counterparty to Bermuda reinsurer RenaissanceRe’s recent private catastrophe bond transaction.

Of course, being a private cat bond deal we’re unlikely to ever be able to 100% confirm this for you and neither party will comment on the matter. However it does seem plausible given the timing and the fact that both parties, LGT and RenRe, have been involved in a recent private cat bond deal with a single investor counterparty.

So perhaps this explains the mystery behind the Mona Lisa Re Ltd. Bermuda domiciled special purpose insurer?

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