Artemis Report On New Bermuda Cat Bond
The Artemis business news website reports today [Apr. 4] the latest catastrophe bond to come to market is a parametric transaction called Bosphorus 1 Re Ltd. — established in Bermuda in January — which is being marketed on behalf of the Turkish Catastrophe Insurance Pool.
Artemis says the Bosphorus Re cat bond brings investors an opportunity to diversify their portfolios in the form of Turkish earthquake risk. Also the deal uses a parametric trigger which is another rarity in the market and we’re pleased to be able to bring you more details on this.
“Bringing a rare source of true diversification to the catastrophe bond market, Bosphorus 1 Re is sure to be in demand with investors as long as they buy into the parametric trigger and risk modelling that underlies the transaction so the details here are crucial,” reports Artemis. “Parametric cat bonds are few and far between and tend to only be on diversifying deals, such as Japanese peril cat bonds like Kibou Ltd., the Multicat Mexico deals and now this Turkish quake cat bond.
“Through Bosphorus 1 Re Ltd.’s sale of catastrophe bond notes to investors, the Turkish Catastrophe Insurance Pool [TCIP] is seeking a multi-year source of fully-collateralized reinsurance protection for certain Turkish earthquakes which meet the defined parameters in the trigger on a per-occurrence basis.
Bosphorus 1 Re Ltd. is a Bermuda domiciled special purpose insurer, registered on the island on the 11th January 2013.
The single tranche of Series 2013-1 Class A notes it is seeking to issue has a preliminary size of $100 million, although if the deal is attractive to investors and the TCIP has a desire to grow the cover it provides that could well increase before it completes.
The notes will provide reinsurance cover for earthquakes affecting the Istanbul region of Turkey, so coverage is limited to the region of the country with the highest insurance density understandably.
For the full Artemis report, go here.
