AlphaCat crafts first cat bond to cover Latin America risks

In what represents an important step forward for the insurance-linked securities (ILS) markets, AlphaCat Managers, the ILS investment adviser that is a subsidiary of Validus Holdings, has completed the first catastrophe bond to cover risks from Latin America.

The $5 million private deal will transfer risks generated by Brazilian reinsurer Terra Brasis Resseguros into the capital markets on an indemnity basis.

The bond, calkled Alpha Terra Validus I, was issued through a segregated account of White Rock Insurance (SAC), which is managed by Aon Insurance Managers (Bermuda). The notes were admitted to the Bermuda Stock Exchange as of February 6, 2017 and will remain listed there until maturity.

Lixin Zeng, the CEO of AlphaCat, said: “We are pleased to have partnered with Terra Brasis Re in bringing this innovative transaction to market and look forward to working together in the future.”

Rodrigo Botti, the Director of Terra Brasis Re, added: “The partnership with AlphaCat will significantly contribute to the development of the Latin American insurance and reinsurance markets, as it brings capital markets based solutions to the region’s exposures.”

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