Randolph Re (Series 2022-1)

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Randolph Re (Series 2022-1) – At a glance:

  • Issuer: White Rock Insurance (SAC) Ltd.
  • Cedent / sponsor: Mercury Insurance
  • Placement / structuring agent/s: Aon Securities is sole structuring agent and bookrunner
  • Risk modelling / calculation agents etc: Unknown
  • Risks / perils covered: California wildfire
  • Size: $25m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Jul 2022

Randolph Re (Series 2022-1) – Full details:

This is the third insurance-linked securities (ILS) transaction to come to market from Aon’s Randolph Re private catastrophe bond issuance and placement platform.

We’ve learned that it covers wildfire risks again, like the previous two Randolph Re deals and given similarities in issuance and maturity dates we suspect the sponsor will have been Mercury Insurance again.

This third Randolph Re issuance saw Aon’s White Rock Insurance (SAC) Ltd., acting on behalf of its segregated account Randolph Re 2022-1 and under the Randolph Re Program, has issued $25 million of Series 2022-1 notes.

The Series 2022-1 insurance-linked notes issued by Randolph Re are due  as of July 6th 2023, which ties in with the previous deals, as all three have had a July 6th maturity date.

As a result, we anticipate this latest Randolph Re private cat bond represents a one-year fully collateralised reinsurance agreement that has been securitised for the cedent, which is again likely to be Mercury Insurance.

We do know that the notes will provide the cedent with wildfire reinsurance protection focused on California.

It’s likely they also cover fire losses following an earthquake as well, as the 2021 Randolph Re private cat bond did.

Also like last year, we’re told the $25 million of Randolph Re Series 2022-1 private cat bond notes will provide their wildfire reinsurance protection on an indemnity trigger and per-occurrence basis.

They are likely to be zero-coupon notes as well, although we do not know their pricing, but we are told they are likely to have been issued discounted at somewhere around 93 cents on the dollar.

The $25 million of Series 2022-1 notes issued by Randolph Re have been admitted to the Bermuda Stock Exchange (BSX) for listing.

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