Marsh and GC’s Mangrove Risk Solutions issues $20m private cat bond

A new private catastrophe bond transaction has come to light, as Artemis has learned that Mangrove Risk Solutions Bermuda Ltd., the platform operated by Marsh McLennan and reinsurance broker Guy Carpenter, has issued a new $20 million Mangrove Risk Solutions Bermuda Ltd. (Series 2024-D) transaction.

This is the first transaction issued by Mangrove Risk Solutions Bermuda Ltd., which is a vehicle that only came into being earlier this year when the private cat bond platform Isosceles Insurance Ltd. was renamed, as we reported at the time.

Mangrove Risk Solutions is a Class 3 Bermuda registered insurance company that has been well-used for issuance of private catastrophe bonds and other insurance-linked securities (ILS) offerings over the years, under its previous name of Isosceles.

As Isosceles Re, it was originally launched by Marsh McLennan with its reinsurance broker Guy Carpenter back in 2020.

It’s a platform that makes issuance of 4(2) or 4(a)(2) securities more simple, which are the typical formats for private catastrophe bonds.

As such, now Mangrove Risk Solutions, the vehicle is an ILS focused platform through which Marsh McLennan and Guy Carpenter can help clients access sources of capital markets reinsurance capacity and also facilitate the securitization of reinsurance deals for ILS fund managers and investors.

Since this structure became active in issuing private catastrophe bond notes, we have tracked over $317 million in issuance under the Isosceles name and now the first $20 million under Mangrove Risk Solutions.

You can filter our Deal Directory to view only private catastrophe bonds and you can also analyse private cat bond issuance by year using our interactive chart.

This latest private cat bond or ILS issued by Mangrove Risk Solutions Bermuda Ltd. is a Series 2024-D transaction.

Mangrove Risk Solutions Bermuda Ltd. has issued $20 million of discounted zero-coupon notes, on behalf of a segregated account 2024-D, with the notes sold to provide an investment for the collateral that underpins a reinsurance or retrocession agreement.

The $20 million of notes issued are due for maturity as of May 10th 2025, suggesting this transaction provides reinsurance or retrocessional coverage for a term of under one-year. It could be a mid-year reinsurance renewal deal that has been transformed and securitized, we suspect.

The $20 million of 2024-D notes are structured as discounted zero coupon participating notes, which is typical of many private ILS transformations of collateralised reinsurance or retrocession contracts, converting them into a more liquid and investable security, usually for a cat bond specific fund or ILS strategy.

As with every private ILS or cat bond deal, until we learn more details we assume these cover property catastrophe reinsurance or retrocession risks.

With private cat bonds, sometimes the risks will have been transformed to enable an ILS fund or investor to source an asset that meets a catastrophe bond mandate, so a transformation from traditional reinsurance or retro. Or, simply, so a cedant can access capital market investors for protection in a more efficient manner than undertaking a full 144A cat bond issuance process.

Private ILS or cat bond lite arrangements normally fit into one of a number of use-cases. Either as a straight collateralised reinsurance or retro cover for a carrier, that has been transformed and securitised, to be assumed by a single ILS fund or investor, or a small group of funds/investors.

Or, they can also represent ILS fund-to-fund transactions (hedging), or the transformation of a specific risk transfer arrangement, such as an industry-loss warranty (ILW).

Reinsurance broker Guy Carpenter’s specialist capital markets unit GC Securities will have structured the transaction and acted as a bookrunner for this Isosceles Insurance Ltd. private ILS transaction, while Marsh Management Services will have acted as the insurance manager for the vehicle itself, as has been seen with all the previous issuances under the Isosceles name.

Being a Bermuda vehicle, the notes have been listed on the Bermuda Stock Exchange (BSX), which is again an enhancement for liquidity.

With this latest $20 million private catastrophe bond from Mangrove Risk Solutions, private cat bond issuance tracked by Artemis has now reached $283.25 million for the year so far.

You can analyse private cat bond issuance by year in our chart that breaks down all our tracked issuance by type here.

2017 remains the record year for private cat bonds that we have tracked, at just over $1.12 billion of issuance recorded by Artemis.

Read more about this new Mangrove Risk Solutions Bermuda Ltd. (Series 2024-D) private catastrophe bond in our extensive cat bond Deal Directory.

You can filter our Deal Directory to view only private cat bond deals.