Seaside Re (Series 2021-42)

This private catastrophe bond, or cat bond lite transaction has been issued by reinsurance firm Hannover Re’s segregated accounts vehicle Kaith Re Ltd.

Hannover Re continues to play a key facilitation role in helping ceding companies to gain access to capital market investors through transactions structured in catastrophe bond lite form, as well as in facilitating investor access to cedents or its own portfolios of reinsurance risks.

For this new Seaside Re 2021-42 private cat bond, Hannover Re’s transformer vehicle Kaith Re Ltd. acted on behalf of its segregated account named Seaside Re to issue a $6.25 million tranche of Series 2021-42 private cat bond notes.

The proceeds from the sale of these notes to cat bond investors will have been used as collateral to support an underlying reinsurance or retrocession agreement for the ceding re/insurer that is the ultimate beneficiary of this protection.

The $6.25 million Series 2021-42 tranche of notes issued by Seaside Re are exposed to U.S. property catastrophe risks and have a due date of January 15th 2022 (the same date as a number of private Seaside Re cat bonds that listed a few days earlier), so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction entered into around the January 2021 renewals, as are most commonly seen with private cat bonds.

Hannover Re’s Seaside Re private catastrophe bond program provides ILS investors with a mechanism to access certain U.S. property catastrophe risks in cat bond lite securitised form, with the potential for secondary liquidity and ability to meet certain of their investor and fund mandates.

As with all private ILS and cat bond lite deals, the full details of the transaction and underlying reinsurance or retrocessional coverage they provide are not available to us.