1886 Re Ltd. (Series 2025-1)

This is the first Rule 144A catastrophe bond issuance for sponsor Kingstone Insurance Company, the main underwriting entity of northeast US regional property and casualty insurance holding company Kingstone Companies, Inc.

The issuer is a recently formed Bermuda based special purpose entity named 1886 Re Ltd. and the vehicle will issue a single tranche of Series 2025-1 cat bond notes that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between it and the ceding entity Kingstone Insurance Company, we understand.

We believe the name could be a reference to 1886 being the year the Statue of Liberty was dedicated, which would make sense given Kingstone’s northeast and New York portfolio focus.

Kingstone Insurance will benefit from a four year source of US named storm reinsurance protection with its debut catastrophe bond, we are told.

The 1886 Re Ltd. Series 2025-1 Class A notes will provide named storm protection across New York, New Jersey, Connecticut, Massachusetts and Rhode Island on an indemnity trigger and per-occurrence basis, over four annual risk periods from July 1st 2025 to the end of June 2029, sources said.

We’re told that the coverage from this first 1886 Re cat bond would attach after $200 million of losses to Kingstone Insurance and cover a share of the Kingstone reinsurance tower up to exhaustion at $440 million.

As a result, the $100 million of Series 2025-1 Class A notes that 1886 Re Ltd. is offering will come with an initial attachment probability of 2.027%, an initial expected loss of 1.477%, and they are being offered with price guidance in a range from 4.25% to 5%, Artemis understands.

Update 1:

We’re told that Kingstone’s target for its debut 1886 Re catastrophe bond has been increased, with now from $100 million to as much as $125 million of named storm reinsurance being sought from this issuance.

At the same time, the price guidance for the Class A notes has been updated to a spread of 4.5%, so within the lower-half of the original range that was being offered.

Update 2:

We understand that Kingstone has now successfully secured its upsized target for $125 million of named storm reinsurance from this new 1886 Re Ltd. Series 2025-1 catastrophe bond.

Sources said the pricing has been finalised to pay investors a spread of 4.5%, so within the lower-half of the initial guidance range.