Ashera Re Ltd. (Series 2024-1)

This is the first catastrophe bond to be sponsored by PURE, which is a high-net worth insurance specialist encompassing the Privilege Underwriters Reciprocal Exchange (PURE) and PURE Specialty Exchange, among other entities, and is ultimately owned and part of the Tokio Marine Holdings group of companies.

Ashera Re Ltd. has been established in Bermuda for the issuance of series of catastrophe bond notes, to source colateralized reinsurance from the capital markets for PURE.

For its debut Ashera Re catastrophe bond issuance, PURE is seeking capital markets backed and fully-collateralized reinsurance to protect the portfolios of its Privilege Underwriters Reciprocal Exchange (PURE), which is Florida domiciled, and PURE Specialty Exchange, which is an Arizona-domiciled Domestic Surplus Lines insurer, while other underwriting entities could in future benefit from the cat bond coverage as well, should PURE elect to include them.

PURE’s Bermuda vehicle Ashera Re Ltd. is aiming for a Series 2024-1 Class A notes issuance that is targeted as $100 million or greater in size, we understand.

The coverage sought is reinsurance against losses from named storms and earthquakes affecting the US and Canada, with protection to be provided on an indemnity trigger and per-occurrence basis, across a three-year term running from April 1st.

Sources said that this first Ashera Re catastrophe bond will provide PURE with reinsurance for a portfolio of its personal property insurance business lines, which includes high value homes, motor, art and collectibles, and personal boat policies.

The geographic spread of this business is significant, as while PURE had begun as a Florida focused reciprocal, it has expanded rapidly to offer insurance across the US and in Canada.

We understand the largest exposures, in expected loss terms, are northeast and Florida named storm or hurricane events, while California presents the largest earthquake risk to these cat bond notes.

The currently $100 million of Series 2024-1 Class A notes that Ashera Re Ltd. is offering would attach their reinsurance coverage at $1 billion of losses, protecting PURE across a share of its losses up to $1.6 billion, we are told.

As a result, the Class A notes come with an initial base attachment probability of 2.47%, an initial base expected loss of 1.68% and are being offered to cat bond investors with spread price guidance in a range from 5.25% to 5.75%.

Update 1:

We’re told the target size for this Ashera Re 2024-1 cat bond is now $105 million, while the price guidance has been updated to a lower range of 5% to 5.25%.

Update 2:

We understand that PURE has now successfully secured the slightly upsized $105 million of reinsurance from its debut Ashera Re 2024-1 catastrophe bond, with the notes pricing below the initial guidance, for a risk spread of 5%.