Lloyd’s announces first 144A catastrophe bond on London Bridge

08 Jan 2024

Lloyd’s, the world’s leading marketplace for insurance and reinsurance, today announced that the first 144A catastrophe bond has been issued on its risk transformation platform London Bridge 2 PCC Limited.

Beazley is the sponsor of the US$100m transaction, on behalf of its Lloyd’s syndicates (623, 2623 and 3623), its North American insurance company (Beazley Excess and Surplus Inc.) and European carrier (Beazley Insurance DAC).

The indemnity reinsurance coverage provides multi-year protection for named storm and earthquake events affecting the United States, Canada and parts of the Caribbean.

The transaction brings the aggregate issuance of securities to institutional investors by the London Bridge vehicles to approximately US$750 million, across 13 cells.

Aon Securities LLC (“Aon Securities”) was the sole structuring and book building agent and Mayer Brown acted as deal counsel for the transaction.

“We are very pleased to see the efficient close of the first excess of loss cat bond transaction by London Bridge 2. This is another important milestone for this strategically important risk transformation vehicle for the Lloyd’s market and reaffirms the flexibility this vehicle has, provided by its regulatory permissions. We are delighted that Beazley has been the pioneer for this new issuance, which confirms our belief that the UK market, and Lloyd’s in particular, is a great place for institutional investors to gain access to global (re)insurance risk.”

Burkhard Keese, Lloyd’s CFO

“Beazley is delighted to be sponsoring the first 144A property catastrophe bond utilising the London Bridge platform. We were impressed with the smooth and efficient way that an ILS transaction can be issued out of the UK market and we are grateful for the support received from Lloyd’s and Artex throughout the process.”

Adrian Cox, CEO of Beazley plc

“We are proud to have acted as sole structuring agent and bookrunner on not only the inaugural excess of loss catastrophe bond by London Bridge 2 but importantly Beazley’s first property catastrophe bond transaction. From a transaction timeline perspective the use of the UK PCC allowed for a seamless and efficient execution timeline and was well received by the investor community.”

Richard Pennay, CEO ILS of Aon Securities

“On behalf of the Mayer Brown team it was a pleasure to work with Beazley and the rest of the advisers to bring this first-in-kind transaction to market and we hope it offers a roadmap to other sponsors to consider using the London Bridge structure.”

Colin Scagell, Partner at Mayer Brown

Notes to Editors

1. The London Bridge risk transformation platform is an efficient way for market participants to either (a) raise solvency capital to support underwriting at Lloyd’s and/or (b) transfer specific risks to the capital markets as part of a Lloyd’s syndicates’ risk management strategy.

2. Find out more about investing at Lloyd’s and about the London Bridge 2 PCC

3. London Bridge 2 PCC was sponsored by Lloyd’s as part of its Future at Lloyd’s strategy.

4. Lloyd’s acted as the sponsor for the application to form the new PCC. London Bridge 2 PCC Limited provides independent services to investors and Members of Lloyd’s. Day-to-day management is provided by Artex with overall responsibility for running the PCC resting with the Board of London Bridge 2 PCC Ltd.

5. London Bridge 2 PCC Limited’s insurance management services are provided by Artex, who specialise in the management of ILS vehicles and operate across multiple jurisdictions.

6. More news and information available from lloyds.com

Enquiries to

pressoffice@lloyds.com

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