Reinsurer sponsors Brazil’s first ILS transaction

IRB-Brasil Resseguros SA has sponsored Brazil’s first insurance-linked securities transaction, raising 33.7 million Brazilian reals ($6.2 million) to cover risks tied to its surety bond portfolio, according to Fitch Ratings, Artemis reported. These notes are backed by legal guarantees rather than natural catastrophe risks. According to Fitch, the new instruments can expand reinsurers’ access to alternative sources of capital, diversify portfolios and help stabilize reinsurance costs.