Hong Guo, Arbol’s EVP & chief insurance officer, said, “Arbol Re Ltd. represents an evolution in Arbol’s ability to facilitate reinsurance transactions, with a particular emphasis on parametric reinsurance deals involving the capital markets. As a Collateralized Insurer, Arbol Re’s role is not to assume risk but to enable transactions that are entirely collateralized. This ensures a secure, efficient platform for both Arbol and the capital markets to manage and mitigate climate-related risks.”
Appleby’s role in establishing Arbol Re Ltd. as a fully collateralized reinsurer included advice and assistance in the drafting of the business plan and the registration process. The transaction was led by Brad Adderley, Bermuda Managing Partner and assisted by Associate Amber Farrington and Paralegal Remond Bonne Smith.
The Bermuda Monetary Authority (BMA) developed the collateralized insurance and reinsurance class of Limited Purpose Insurer (LPI) in response to the increasing sophistication and scope of the insurance-linked securities (ILS) market. It offers a structure that can be used for multi-transactional purposes, underwriting collateralized reinsurance, retrocession and other forms of ILS transaction, while dealing with numerous sources of capital, given the ability to segregate cells or transactions from each other.