Residential Reinsurance 2017 Ltd

U.S. primary military mutual insurer USAA has added another of its catastrophe bonds to the list of those considered at-risk of facing losses, extending the maturity on the $55 million per-occurrence Class 1 tranche of its Residential Reinsurance 2017 Ltd. (Series 2017-2) transaction.

USAA is moving a little closer to understanding just how big a recovery it can make from ILS investors against the reinsurance provided by its Residential Re catastrophe bond series, now opting to repay $20 million of the extended notes to investors, but still holding onto $150 million more with a further extension of maturity.

U.S. primary military mutual insurer USAA has elected to extend the maturity dates for $170 million of catastrophe bond notes across three Residential Re issuances, as the firm continues to expect that it may be able to recover some of its losses from the principal that remains outstanding.

According to Artemis’ sources, U.S. primary military mutual insurer USAA has reduced its estimate of aggregated qualifying catastrophe losses and as a result the riskiest layers of the insurers aggregate Residential Re catastrophe bonds are still safe, for the moment.

USAA has secured $295 million of fully-collateralized reinsurance protection from the U.S. primary military mutual insurer’s 30th catastrophe bond issuance, the Residential Reinsurance 2017 Ltd. (Series 2017-2) multi-peril deal, with pricing that has dropped to the bottom of guidance on the lower risk tranches of notes.

The latest and 30th catastrophe bond to be sponsored by U.S. primary military mutual insurer USAA looks set to increase in size, as the latest information from our sources suggests the transaction will complete to provide the sponsor up to $285 million in reinsurance coverage.

According to sources, U.S. primary military mutual insurer USAA is anticipating losses of between $387 million and $581 million from recent wildfires in northern California, a financial impact which raises the likelihood that some of the riskiest layers of the insurers aggregate Residential Re catastrophe bonds will now be triggered.

U.S. primary military mutual insurer USAA remains the most prolific of catastrophe bond sponsors and is back in the market for its 30th transaction, with a $225 million Residential Reinsurance 2017 Ltd. (Series 2017-2) multi-peril deal, seeking to expand its capital markets backed source of reinsurance.

U.S. primary military mutual insurance group USAA is now set to secure $425 million of fully-collateralized reinsurance coverage through its new Residential Reinsurance 2017 Ltd. (Series 2017-1) catastrophe bond, with pricing settling at the bottom end of reduced guidance for two tranches, but at the top for a zero-coupon, riskier layer.

U.S. primary insurance group USAA has increased the target size of its new Residential Reinsurance 2017 Ltd. (Series 2017-1) catastrophe bond by 50% to as much as $450 million, as the company looks to take advantage of attractive cat bond market conditions.