Inigo launches $110m cat bond at a ‘turbulent time’ in market

Lloyd’s specialty re/insurer  Inigo has launched its second catastrophe bond of 2022 – Montoya Re II, structured by  Aon Securities and fronted by  Hannover Re.

Montoya Re II closed yesterday (December 13) and is a $110m transaction covering North American named storms and earthquakes. It responds on an industry loss and annual aggregate basis and will be on risk until the end of March 2026. The coupon is 14% above money market fund returns.

Inigo’s first catastrophe bond Montoya Re was launched on April 1 and was a $115m transaction covering earthquake and windstorm risk in the US, Canada and Japan. The risk period was set as three years with a coupon of 6.75% above money market fund returns.

Adam Alvarez, Head of Insight at Inigo, said: “We are very pleased to have sponsored our second catastrophe bond just nine months after the first. Montoya II will provide Inigo with a further $110m of peak zone protection at a turbulent time in the market – this will bring the total amount of outstanding cat bond limit to $225m.

“We continue to find that the risk appetite of ILS investors is complementary to other providers of contingent capital. We were pleased to see that Montoya II attracted investment from both specialist ILS funds and more generalist investors. A rolling programme of issuance will further increase Inigo’s ability to support our clients throughout the cycle. We see these types of transaction as an integral part of the way that Inigo finances its business.”

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