Arthur Re Ltd. – Kanata Re 2026-1

This is the first catastrophe bond where MS Amlin linked Lloyd’s Syndicate 2001 is set to be a beneficiary, so we consider it a first-time market entrant for that reason. It is now the fifth cat bond offering so far under Gallagher Re’s Arthur Re Ltd. platform.

We’re told the ceding entity to this catastrophe bond is Lloyd’s syndicate 2001, with the coverage also set to benefit sub-syndicate 1673, both of which are managed by MS Amlin Underwriting Limited and underwrite for the MS Amlin arm of the global Mitsui Sumitomo insurance group.

We’ve not seen an Amlin entity in the catastrophe bond market since 2014, when Amlin AG sponsored the last of the Tramline Re series of deals. Since then of course, Mitsui Sumitomo Insurance acquired Amlin back in 2016.

For this cat bond issuance for the MS Amlin linked Syndicate 2001 and sub-syndicate 1673, Arthur Re Ltd. is offering what we’re told is currently targeted to be a $100 million tranche of Class A notes to investors on behalf of a segregated account named Kanata Re 2026-1.

The Kanata Re 2026-1 cat bond notes from Arthur Re are designed to provide Syndicate 2001 and sub-entities with a multi-year source of fully-collateralized multi-peril and multi-regional retrocessional reinsurance from the capital markets.

That protection will be on an annual aggregate and industry loss index trigger basis, while the covered perils and regions are U.S. named storm, U.S. and Canada earthquake and European windstorm events.

The protection is designed to run across a four-year term with four calendar year annual aggregate risk periods, we understand, from the start of 2027 to the end of 2030.

The $100 million of Kanata Re 2026-1 cat bond notes will feature franchise deductibles of $10 million for named storms, $25 million for earthquakes and $6 million for European windstorm events, we are told.

The Class A notes would attach their coverage at $600 million and exhaust their coverage at $700 million. It’s important to note we believe this is based on index values not ground-up reported industry losses.

The targeted $100 million offering of the Class A Kanata Re 2026-1 notes will come with an initial attachment probability of 3.01% and initial expected loss of 2.524%, while the price guidance is for a spread in a range from 4.5% to 5%, sources explained.