$10m LI Re 2017-1 private cat bond issued from Hannover Re vehicle

by Artemis on December 27, 2017

German reinsurance giant Hannover Re has facilitated another private catastrophe bond transaction, with the issuance of a $10 million LI Re (Series 2017-1) deal that securitises California earthquake reinsurance risk for an unknown cedent and certain ILS investors.

Hannover Re’s Bermuda domiciled segregated accounts vehicle Kaith Re Ltd. has been involved in a number of private ILS, or cat bond lite, transactions this month, with this being the third following $20 million Seaside Re (Series 2018-1) and $27 million Seaside Re (Series 2018-3) private cat bond deals.

Previous transactions have been issued through segregated accounts named LI Re, with this being the sixth, all of which are listed in our catastrophe bond Deal Directory. The previous five transactions have totaled almost $33 million of risk capital securitised and issued to qualifying ILS investors.

In this latest LI Re private cat bond, LI Re (Series 2017-1), $10 million of notes ($9.99996 to be precise) have been issued by reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., acting on behalf of its segregated account LI Re. The segregated account LI Re 2017-1 private cat bond is due April 10th 2019.

This LI Re private cat bond provides a cedent with collateralized reinsurance protection against losses from certain California earthquake risks. The underlying transaction will be a one year collateralized reinsurance or industry loss warranty (ILW) deal, as are most common with private cat bonds. Further details of the exact nature of this transaction are unavailable.

The $9.99996m of LI Re Series 2017-1 private cat bond notes have been listed on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities.

For Hannover Re, this new $10 million LI Re Series 2017-1 private ILS deal sees the company acting as a service provider to gain fee income by acting as a transformer, fronting reinsurer or facilitator for ILS deals and private cat bond note issues, using the cells of its Bermuda segregated accounts insurer Kaith Re.

We’ve added this new $10 million LI Re (Series 2017-1) private cat bond to the Artemis Deal Directory and what information we have will be included in all of our catastrophe bond and ILS market statistics.

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