LI Re (Series 2022-1)

Hannover Re has used its Bermuda domiciled reinsurance transformer vehicle Kaith Re Ltd. to issue this new Li Re 2022-1 private cat bond, acting on behalf of its segregated account named LI Re.

This LI Re 2022-1 transaction, saw $15 million of notes issued through by Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., acting on behalf of the segregated account named LI Re.

This $15 million LI Re 2022-1 private cat bond transforms and securitises underlying reinsurance related contract risks contained in the segregated account, and is due for maturity February 15th 2023, so it’s likely the underlying is a one-year reinsurance renewal arrangement.

Like previous LI Re private cat bonds, this latest LI Re 2022 deal provides an unknown cedent with collateralized reinsurance or retrocessional protection covering losses from California earthquake risks.

Previous years LI Re private cat bonds also securitized California earthquake risks, so it’s possible this is a renewal of sorts, although the last we saw was issued in 2019 so there may have been a break last year.

This $15m of LI Re Series 2022-1 private cat bond notes have now been listed on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities, having been sold to qualified institutional investors.

The underlying transaction for this private cat bond is likely to be a collateralized reinsurance or industry loss warranty (ILW) arrangement, as are most typical with a private cat bond arrangements. Further details of the exact nature of the transaction are unavailable at this time.