Inigo has announced the issuance of its third catastrophe bond valued at $100 million through Montoya Re Ltd, with this latest cat bond structured to provide coverage against North American named storms and earthquakes, utilizing a PCS industry loss index trigger to determine payouts.
The bond, notable for its coupon rate set at 11.5% above money market fund returns, is a strategic move to bolster Inigo’s financial resilience against natural disasters.
The bond will be fronted by Hannover Re, with Inigo’s Syndicate 1301 at Lloyd’s as the beneficiary of the coverage. The arrangement is part of Inigo’s broader strategy to employ innovative financial instruments to manage risk exposure effectively.
Inigo’s approach to integrating multiyear cat bond placements into its financial strategy is reflective of a broader industry trend towards leveraging capital markets for risk transfer solutions. These bonds offer a stable, long-term capital source, enabling Inigo to meet its clients’ evolving insurance requirements effectively.
This latest bond follows Inigo’s previous two catastrophe bonds, launched on April 1 and December 14, 2022, which collectively secured $225 million in coverage for North American storms and earthquakes. The initial issuance also included coverage for Japan, broadening the geographical scope of Inigo’s risk management strategy.
“We are very pleased to return to the catastrophe bond market with our third transaction which will be on risk until the end of March 2027,” Inigo head of insight Adam Alvarez said. “This issuance will bring our total amount of outstanding cat bond limit to $325 million. ILS investors have shown continued interest in this asset class and this initiative demonstrates Inigo’s commitment to finding effective ways to match investor appetite with our clients’ risk.”
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