HAMILTON, Bermuda--(BUSINESS WIRE)--Ariel Re, a global reinsurance business with offices in Bermuda, London and Hong Kong, has announced it has successfully sponsored Titania Re III, the third issuance from Titania Re Ltd. (Series 2023-1 Notes), with a first-of-its-kind carbon offset feature.
Titania Re III provides Ariel Re with $125 million of collateralized reinsurance cover for named storms and earthquakes in all U.S. States, Puerto Rico, the U.S. Virgin Islands and Canada with an industry loss trigger over three years.
In a first for the cat bond market, Ariel Re will seek to buy carbon offset options from a qualified provider to generate carbon credits in the event of a significant hurricane or earthquake that requires a large number of homes, commercial properties and vehicles to be replaced.
There is no rule that requires replacements to have lower carbon emissions, so Ariel Re is using Titania Re III to mitigate this missed opportunity and buy carbon offsets equivalent to the benefit that would have come from rebuilding or replacing buildings and vehicles with those which have a less damaging carbon impact.
Titania Re III is the third cat bond which Ariel Re has sponsored since the initial Titania Re deal in 2021.
Ryan Mather, Chief Executive Officer of Ariel Re, said: “Ariel Re is extremely proud to have sponsored our third cat bond with a new feature relating to carbon offsets. Our vision is to be the premier manager of reinsurance risk, and launching environmentally-friendly initiatives such as Titania Re III for the building back of business and communities in the wake of natural disasters shows that we can be innovative in the reinsurance solutions we provide to our clients.”
Matthew Twilley, Head of Ceded at Ariel Re, said: “While there is no directive to build back greener, Ariel Re is taking the initiative to help people and businesses to get back on their feet after natural disasters in a way that reduces the harm done to the planet. We want to do good while helping others to do well.”
The cat bond was successfully closed on February 23, 2023. Howden Tiger Capital Markets & Advisory acted as sole structuring agent and joint bookrunner, with Aon Securities LLC acting as joint bookrunner.
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About Ariel Re:
Ariel Re offers innovative insurance and reinsurance solutions and services through our offices in Bermuda, London, and Hong Kong, meeting the business needs of a diverse client base. Ariel Re operates principally through Syndicate 1910 in London and also offers access to Lloyd’s Europe via Syndicate 5336.
Originally founded in 2005, Ariel Re was acquired by Pelican Ventures and J.C. Flowers in November 2020. The new owners provide Ariel Re with significant capital resources and a long track record of supporting successful, entrepreneurial businesses in the (re)insurance industry.
About Pelican Ventures:
Pelican Ventures is a private investment firm specializing in start-up and early-stage investments in the property and casualty (P&C) insurance industry. Our team collaborates closely with world-class executives to identify, develop, and grow the most promising insurance concepts into impactful and sustainable businesses. We leverage our expertise to identify the right product-market fit, optimize the allocation of human and financial capital, and provide ongoing operational advisory and support, allowing our portfolio companies to focus on scaling their operations and achieving long-term success.
About JC Flowers:
J.C. Flowers is a leading private investment firm dedicated to investing globally in the financial services industry. Founded in 1998, the firm has approximately $4 billion of assets under management. J.C. Flowers has offices in New York, London and Palm Beach with a 21-person investment staff who have a combined 300+ years of experience. Over its 25-year history, J.C. Flowers has invested more than $17 billion of capital in 65 portfolio companies in 18 countries across a range of industry subsectors including banking, insurance and reinsurance, securities firms, specialty finance, and services and asset management.
