Catastrophe bond issued via Guernsey ILS structure

Posted: 23/03/2021

Rupert Pleasant_GuernseyFinance_lightThe first humanitarian catastrophe bond covering pure volcanic eruption has been completed using a Guernsey insurance-linked securities (ILS) structure.
A $3m privately placed issuance – sponsored by the Danish Red Cross – has been brought to market by Replexus and Howden Capital Markets through a Guernsey-domiciled reinsurance structure, Dunant Re IC.

Dunant Re IC is an incorporated cell of Replexus ICC (Guernsey), which is managed in Guernsey by Aon Insurance Managers.
The bonds were settled using the Replexus blockchain-based ILS platform, ILSBlockchain. 

The catastrophe bond covers the risk of eruption of 10 volcanoes across three continents. It raised $3m from specialist cat bond investors, with the capital set to be used to support humanitarian aid in the aftermath of an eruption. 

Initial investors in the volcano cat bond included ILS specialist managers Plenum Investments, Schroder Investment Management and Solidum Partners.
Guernsey Finance Chief Executive Rupert Pleasant (pictured) commented: “We have been watching the development of this with great interest. What a great result for the Danish Red Cross, for Replexus and for Guernsey. This is a world first and truly unique example of sustainable finance in the humanitarian market.”
Guernsey Green Finance Chair Dr Andy Sloan added: “Guernsey’s leadership and innovation across ILS, technology and sustainable finance was central to this bond issuance, which provides opportunity for investors to support non-governmental organisations responding to different types of CAT risk.”

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