Achmea secures one-third upsized €100m Windmill III Re 2026-1 catastrophe bond

Achmea, the Netherlands headquartered European insurance group, has now secured a one-third upsized €100 million source of collateralized European windstorm reinsurance from its new Windmill III Re DAC (2026-1) catastrophe bond, pricing the notes below the initial guidance, Artemis has learned.

Achmea came back to the catastrophe bond market at the start of this month, with an initial target to secure €75 million of collateralized European windstorm reinsurance protection from the capital markets through its sponsorship of a Windmill III Re 2026-1 cat bond.

As we then reported in a first update on this deal, Achmea was looking to upsize the Series 2026-1 cat bond issuance by one-third to provide it with €100 million of capital markets backed reinsurance, while at the same time the price guidance was lowered to below the initial range that had been offered.

Now, we understand the upsized ambitions have been achieved, with the notes pricing at their reduced guidance level, securing the one-third larger €100 million source of reinsurance for the sponsor.

This new Windmill III Re Series 2026-1 catastrophe bond sponsorship will be the fifth for Achmea and it sees the company returning to layer on more protection from the capital markets, for the first time looking to stagger the maturities of its cat bond coverage, given the €100 million of reinsurance protection from a Windmill III Re 2024-1 deal remains in-force until the end of June 2028.

You can read about all of Achmea’s Windmill cat bond deals in our extensive Deal Directory.

With the notes now priced and settlement details finalised, Ireland domiciled designated activity company Windmill III Re DAC will issue and sell €100 million of Series 2026-1 Class A cat bond notes to investors.

The notes will provide Achmea’s group reinsurer Achmea Reinsurance Company NV with a four-year source of collateralized European windstorm reinsurance protection on an indemnity trigger and per-occurrence basis.

Like the company’s previous Windmill cat bond, we are told this new issuance will also cover it against losses from certain severe convective or thunderstorm types risks, including hail and tornadoes for the sponsor.

The now confirmed as one-third upsized €100 million of Windmill III Re 2026-1 Class A notes come with an initial expected loss of 2.58% and were first marketed to investors with price guidance in a range from 4.25% to 5%

As we reported in our first update on this cat bond the price guidance was reduced to below that range, updated at a single figure of a 3.75% risk interest spread.

Now, we understand the €100 million of Windmill III Re 2026-1 Class A cat bond notes were successfully priced to pay investors an initial risk interest spread at that lower level of 3.75%.

For comparison, the €100 million of Windmill III Re 2024-1 cat bond notes had an initial expected loss of 2.19% and priced to pay investors an initial risk interest spread of 5.25%, so considerably higher for a lower expected loss than the new Series 2026-1 notes, reflecting reinsurance and cat bond market price softening, as well as investor appetite for a European peril diversifier.

Once this cat bond comes into force for Achmea, the company will benefit from €200 million of European windstorm protection from two outstanding Windmill Re cat bonds, the first time the sponsor has had two issuances in-force at the same time.

You can read all about this Windmill III Re DAC (2026-1)  transaction and every catastrophe bond deal in our extensive Artemis Deal Directory.