Seaside Re (Series 2022-31) – Full details:
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 act as a facilitator to help investors access reinsurance related risk and return in securitized form and cedents to access the capital markets through acting as a risk transformer and facilitator for private catastrophe bonds and insurance-linked securities (ILS).
Hannover Re has used its Bermuda domiciled reinsurance transformer vehicle Kaith Re Ltd. to issue this new private Seaside Re cat bond for 2022.
For this new Seaside Re 2022-31 private cat bond, Hannover Re’s transformer vehicle Kaith Re Ltd. acted on behalf of its segregated account named Seaside Re to issue a $30 million tranche of Series 2022-31 private cat bond notes.
The proceeds from the sale of this tranche of privately placed notes to cat bond investors will have been used to fund collateral to support an underlying reinsurance or retrocession agreement, for whichever ceding re/insurer is the ultimate beneficiary of this protection.
That could, of course, be Hannover Re, which may utilise the Seaside Re program to enable investors to access its retro program in a securitized, cat bond like manner, but we can’t be sure.
Alternatively, Hannover Re uses the private cat bonds to augment the coverage it provides to ceding clients, to be able to supply larger capacity and help intermediate clients access to the ILS and capital markets, enabling it to play a bigger role in their renewals.
This series of $30 million 2022-31 notes issued by Kaith Re’s segregated account Seaside Re are exposed to U.S. property catastrophe risks and have a due date of January 15th 2023.
So, they could represent investor or ILS fund shares of a reinsurance or retrocession tower, a one-year collateralized reinsurance or industry loss warranty (ILW) transaction entered into around the January 2022 renewals, or another private arrangement, as are most commonly seen with private catastrophe bond activity.