Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Sanders Re III Ltd. (Series 2023-1)

The Artemis Catastrophe Bond and Insurance-linked Securities Deal Directory aims to provide a one-stop resource for information on every cat bond and ILS transaction we hold information on. The content of this Deal Directory is provided as is and there will be some omissions. Help us to keep these cat bond and ILS transaction summaries up to date by contacting us if you see an error or omission that you can correct.


Sanders Re III Ltd. (Series 2023-1) – At a glance:

  • Issuer: Sanders Re III Ltd.
  • Cedent / sponsor: Allstate
  • Placement / structuring agent/s: Aon Securities is sole structuring agent and joint bookrunner. Goldman Sachs is joint bookrunner.
  • Risk modelling / calculation agents etc: AIR Worldwide
  • Risks / perils covered: US named storm, earthquake, severe weather, wildfire, volcanic eruption, meteorite impact (excl. Florida)
  • Size: $250m
  • Trigger type: Indemnity
  • Ratings: NR
  • Date of issue: Mar 2023

Sanders Re III Ltd. (Series 2023-1) – Full details:

This will be the first catastrophe bond to be sponsored by Allstate of 2023 and sees the company returning to seek three layers of collateralized and multi-year catastrophe reinsurance protection, covering multiple perils across the United States, except for in the state of Florida.

Allstate’s Bermuda based special purpose insurer (SPI) Sanders Re III Ltd. is targeting the issuance of three tranches of Series 2023-1 cat bond notes, we’re told.

The notes will provide Allstate with a source of US nationwide, except Florida, coverage against losses from US named storms, earthquakes, severe weather events, wildfires, volcanic eruptions and meteorite impacts, all on an indemnity trigger basis.

Losses from Allstates personal lines property and auto insurance businesses, including from affiliates, are covered, we’re told.

A $100 million tranche of Class A notes will provide four-years of per-occurrence cover above an attachment of $4.75 billion of losses, giving them an initial attachment probability of 1.02%, base expected loss of 0.9382%, and as a result these are offered with price guidance of 5.75% to 6.5%, we understand.

A $125 million tranche of Class B notes will provide four years of annual aggregate reinsurance across a $500 million layer attaching at $3.598 billion of losses, we understand, giving them an initial attachment probability of 1.02%, base expected loss of 0.7402%, and as a result these are offered with price guidance of 15% to 15.75%.

The final Class C tranche are a one-year, zero-coupon set of notes, that would provide occurrence cover across a $250 million layer attaching at $750 million of losses. These are far riskier, having an initial attachment probability of 28.13% and expected loss of 18.63%. There is no price guidance at this stage, we’re told, but if successful this would be one of (if not) the riskiest layers of cat bond notes ever sponsored by Allstate and the price would be expected to be high as a result.

With that final tranche, it seems Allstate is testing out the cat bond markets appetite for a much lower-layer of risk, likely given the challenging reinsurance market environment it is likely to face in renewing lower-layer coverage.

Update 1:

We’re told the riskier, zero-coupon and one-year Class C tranche of notes are now unlikely to be placed with this syndication, suggesting that layer of risk will either be placed privately or in the traditional reinsurance market.

For the other two tranches of notes, the Class A occurrence remains at $100 million while its price guidance has been lowered and fixed at 5.75%, so the bottom end of initial guidance.

The Class B annual aggregate notes are now targeted as between $125 million and $150 million, while their price guidance has narrowed towards the upper-end at 15.5% to 15.75%.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

« Go back to the Catastrophe Bond Deal Directory

Help us keep this valuable resource up to date. If you have information on a catastrophe bond or insurance-linked security deal we have not covered or can see something that we should change, please contact us to let us know.