Seaside Re (Series 2024-12)

This $7.5 million Seaside Re (Series 2024-12) private catastrophe bond, or cat bond lite transaction has been issued by global reinsurance company Hannover Re’s Class 3 insurer and 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 its cedents to access the capital markets for complementary reinsurance capital.

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 also cedes risk through its retrocession program, some of which may be securitized using Kaith Re.

Hannover Re uses Bermuda domiciled Class 3 insurer and reinsurance transformer vehicle Kaith Re Ltd. to issue its private cat bonds.

This issuance is of $7.5 million of notes from a Seaside Re (Series 2024-12) tranche, which are exposed to U.S. property catastrophe risks and have a due date of January 15th 2025.

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 Series 2024-12 issuance 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 2024 reinsurance renewals, or another private arrangement transformed to be matched with capital market investor appetite.