28 January 2019ILS

AIG's AlphaCat completes $5m cat bond deal with Terra Brasis Re

AlphaCat Managers, the insurance-linked securities (ILS) fund manager subsidiary of AIG, has completed a $5 million private catastrophe bond transactions with Brazilian reinsurer Terra Brasis Re.

The 2019 ‘Alpha Terra Validus III’ bond is the third issuance of this arrangement covering Latin American reinsurance catastrophe risks.

As part of the deal, the 2019 notes  provide retrocessional reinsurance protection to Terra Brasis Re for property catastrophe exposures, including multi-country earthquake.

The indemnity triggered vehicle is due for maturity on January 15, 2020, listed on the Bermuda Stock Exchange (BSX) and placed with AlphaCat investors.

"In 2017 we forged new ground alongside Terra Brasis, bringing ILS into Latin America," said AlphaCat CEO Lixin Zeng. "Extending our partnership in 2018 and again in 2019 demonstrates ILS is established in the region.”

Rodrigo Botti, CEO of Terra Brasis Re, commented: “We are pleased to continue to count AlphaCat as a close partner. Insurance penetration in Latin America has been historically low. Fostering ILS technology in the region will be an important tool to close this protection gap.”

AlphaCat was previously a subsidiary of Validus Holdings before it was acquired by AIG.