Seaside Re (Series 2020-2) – Full details:
This is the latest private catastrophe bond transaction issued using reinsurance firm Hannover Re’s segregated accounts vehicle Kaith Re Ltd., as the reinsurer continues to help ceding companies gain access to capital market investors through transactions structured in cat bond lite form.
For the Seaside Re 2020-2 private cat bond, Hannover Re’s reinsurance transformer vehicle Kaith Re Ltd. acted on behalf of the segregated account named Seaside Re to issue the $20 million tranche of Series 2020-2 notes, with the proceeds from the sale of the notes to investors used as collateral to support an underlying reinsurance or retrocession agreement for the ceding re/insurer and ultimate beneficiaries.
The Series 2020-2 notes issued by Seaside Re both have a due date of January 15th 2021, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most commonly seen with private cat bonds.
The Jan 15th due date is identical to other recent Seaside Re cat bond transactions, suggesting they support layers of the same program. This is most likely aligned with Hannover Re’s own retrocessional reinsurance program, so this now growing series of securitised private cat bond notes enable investors to access insurance-linked returns underwritten by and sourced from the reinsurer.
The Seaside Re private cat bond program offers a way for ILS investors to access certain U.S. property catastrophe risks in cat bond lite securitised form with the potential for secondary liquidity and meeting certain of their investor and fund mandates.
As with all these private ILS deals, full details of the transaction and underlying reinsurance or retrocessional coverage they provide are not available to us.