Arthur Re Ltd. – Nature Coast Re 2026-3

Expansive US primary insurance group SafePoint is now in the catastrophe bond market seeking annual aggregate industry-loss triggered named storm protection through a transaction that is being issued using the Arthur Re Ltd. platform, which is Gallagher Re’s structure that has been designed to make issuing index trigger cat bonds more cost effective and efficient.

For this index triggered cat bond, SafePoint is utilising the Gallagher Re operated issuance structure, Arthur Re Ltd., a platform that the broker developed to make issuance of industry-loss index trigger cat bonds more cost effective and efficient.

For this cat bond issuance for Safepoint, Arthur Re Ltd. is offering what we’re told is currently mooted as a $100 million tranche of Class A notes to investors on behalf of a segregated account named Nature Coast Re 2026-3.

We understand that the ceding company to this cat bond issuance is actually Pompano Re Ltd., a special purpose insurer (SPI) that SafePoint established back in 1999 and that now acts as a captive reinsurer for the insurer and its reciprocal underwriting entities.

Pompano Re, while now being SafePoint’s main captive reinsurance entity, can also interface with capital markets sources of capacity as well, so it makes sense to see it used to intermediate between the issuer Arthur Re and the SafePoint entities for a catastrophe bond.

The Nature Coast Re 2026-3 cat bond notes from Arthur Re are designed to provide Pompano Re with a multi-year source of fully-collateralized US named storm retrocessional reinsurance from the capital markets.

That cover will cascade down to protect underwriting portfolios of the main SafePoint Insurance entity, as well as the Louisiana focused Cajun Underwriters Reciprocal Exchange entity, and the Florida homeowner and business owner focused Manatee Insurance Exchange.

That protection will be on an annual aggregate and industry loss index trigger basis, as we said. While the coverage is across all 50 states of the US, as well as DC and the US Virgin Islands and the term of protection will be across a roughly four year term to the end of November 2030, with annual aggregate risk periods that cover four hurricane seasons for the sponsor.

We understand that the single tranche of Class A Nature Coast Re 2026-3 notes will feature (note this is based on index values not ground-up reported industry losses) a franchise deductible of $40 million, an attachment point at $450 million and exhaustion at $650 million.

As we said, we’re told the target is for a $100 million offering of the Class A Nature Coast Re 2026-3 notes, which we understand will come with an initial attachment probability of 5.39% and initial expected loss of 4.082%, while the price guidance is for a spread in a range from 7.25% to 8%.