Nature Coast Re Ltd. (Series 2024-1)

Safepoint Insurance Company is back in the catastrophe bond market for what will be its sixth issuance and its second under this Nature Coast Re program.

In November 2023, Safepoint secured $195 million in named storm reinsurance protection from a Nature Coast Re Ltd. (Series 2023-1) for Florida and Louisiana.

For this Nature Coast Re 2024-1 catastrophe bond, Safepoint is now targeting coverage across a wider area of the hurricane-exposed US coastline.

For this Series 2024-1 cat bond, Nature Coast Re Ltd. is looking to issue a single $75 million tranche of Class A notes that will be sold to investors and the proceeds used to collateralize a reinsurance agreement to benefit the SafePoint ceding entities.

The notes will provide SafePoint and its two reciprocal underwriting entities with a roughly four year source of fully-collateralized reinsurance protection against named storm losses in the covered states.

The protection will be on a per-occurrence basis and use an indemnity trigger, running until early June 7th 2028, we understand.

The $75 million of Class A notes feature two attachment points, we are told, for Florida attaching at $300 million in losses and covering a share to $500 million, while for the other states attaching at $600 million of losses and covering a share up to $800 million.

So the layer of SafePoints reinsurance tower where this new Nature Coast Re 2024-1 cat bond will feature is $200 million in size, suggesting that would be a maximum this deal could grow to, if investor interest was sufficiently strong.

The combined attachment point for the notes is 2.59% and expected loss is 1.96%, while for Florida only the EL is said to be 1.11% and the other states 0.87%, suggesting there is more covered exposure in Florida than anywhere else, as you might expect.

In pricing terms, the currently $75 million of Nature Coast Re 2024-1 Class A notes are being offered to investors with spreads in a guidance range from 12.75% to 13.75%, we understand.

It’s also notable that this is the first catastrophe bond issuance to ever feature Acrisure Re as a service provider, acting in this case as the Swiss and UK placement agent.

Update 1:

It took almost one month for any updated information to become available for this new catastrophe bond from SafePoint, which we suspect was due to the way pricing was evolving in the market at the time of its initial launch.

We are now told the size was reduced to $50 million, which the pricing of the notes rose and was fixed at 14.75%, so around 11% higher than the mid-point of initial guidance.