High Point Re Ltd. (Series 2027-1)

Selective Insurance Company has returned to sponsor its second catastrophe bond, with this transaction set to renew and expand on the reinsurance coverage it had in place from its debut High Point Re Ltd. (Series 2023-1) issuance that matures at the end of 2026.

That Series 2023-1 cat bond had provided Selective multi-peril coverage across the US except for the states of California, Florida, Louisiana and Texa. But this new High Point Re 2027-1 cat bond will include coverage for all 50 US states and DC, we understand.

High Point Re Ltd., a Bermuda based special purpose insurer (SPI), is targeting issuance of a single $300 million tranche of Series 2027-1 Class A notes, which will be sold to investors and the proceeds used to collateralize a multi-year and multi-peril reinsurance agreement with the sponsor Selective Insurance Company.

The cat bond notes that High Point Re Ltd. is offering are designed to provide Selective and subsidiaries with a four year source of reinsurance to the end of 2030, covering it against losses from U.S. named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impacts and volcanic eruptions across the United States, we understand.

That reinsurance will provide its protection on an indemnity trigger and per-occurrence basis, sources said, with the targeted $300 million or greater tranche of Class A notes attaching their reinsurance protection from an $800 million loss and covering a share of losses up to $1.5 billion for Selective.

As a result, the High Point Re Series 2027-1 Class A cat bond notes will come with an initial attachment probability of 0.93%, an initial base expected loss of 0.6% and we are told they are being offered to investors with price guidance for a spread in a range from 2.75% to 3.25%.