Seaside Re (Series 2023-11) – Full details:
This Seaside Re 2023-11 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 operates, in part, as a facilitator to help investors access reinsurance related risk and returns in securitized form, as well as helping cedents to access the capital markets.
The reinsurer does this by acting as a risk transformer and facilitator for 144A cat bonds, private catastrophe bonds and other collateralised reinsurance related insurance-linked securities (ILS).
Hannover Re utilises its Bermuda domiciled reinsurance transformer vehicle Kaith Re Ltd. to issue its private Seaside Re cat bonds.
This first issuance is a $10 million Seaside Re (Series 2023-11) tranche, which are exposed to U.S. property catastrophe risks and have a due date of January 15th 2024.
With each of these private cat bond deals, the proceeds from the sale of each tranche of privately placed notes to cat bond investors will fund the collateral requirements to support an underlying reinsurance or retrocession agreement, for whichever ceding re/insurer is the ultimate beneficiary of the protection.
This could, of course, be Hannover Re, which can utilise the Seaside Re program to enable investors to access its retro program in a securitized, cat bond like manner, or the reinsurer working to support a cedent.
These cat bond lite deals can represent, investor or ILS fund participation in a reinsurance or retrocession tower, a one-year collateralized reinsurance or industry loss warranty (ILW) transaction entered into around the January 2023 renewals, or another private arrangement transformed to be matched with capital market investor appetite.