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American Integrity returns for $100m Florida named storm cat bond


American Integrity Insurance Company of Florida, Inc. is back in the catastrophe bond market seeking $100 million or more in collateralized Florida named storm reinsurance with an Integrity Re Ltd. (Series 2023-1) issuance.

american-integrity-logoThis will be the sixth in the Integrity Re series of catastrophe bonds for American Integrity, as the company continues to place insurance-linked securities and the capital markets at the heart of its catastrophe reinsurance arrangements.

American Integrity has been sponsoring catastrophe bonds to provide Florida focused collateralized and multi-year reinsurance protection since  2017. Details of every cat bond from American Integrity can be found here.

For 2023, the insurer is again using its Bermuda special purpose insurer (SPI), Integrity Re Ltd., which will seek to issue a single tranche of Series 2023-1 Class A notes, with the proceeds set to collateralize a new capital markets backed source of peak catastrophe reinsurance coverage for American Integrity.

Hannover Re will front the capital markets for American Integrity, entering into a retrocession agreement with the issuing vehicle and then passing on the reinsurance protection to the ceding insurer.

This Integrity Re Series 2023-1 cat bond will provide American Integrity with a targeted $100 million or more in reinsurance protection against named storm events in Florida, on an indemnity and cascading per-occurrence basis across two Atlantic wind seasons, with the risk period running from June 1st 2023 to the end of May 2025, sources said.

The Class A notes will have an initial attachment point at $450 million of losses, covering a percentage of a layer up to $650 million in the American Integrity reinsurance tower, we’re told. The effective loss attachment point is higher though, as the notes will inure to reinsurance layers beneath, so attaching around $925 million on a first-event basis, we understand.

As a result, the targeted $100 million of notes Integrity Re Ltd. will issue come with an initial attachment probability of 1.67%, an initial base expected loss of 1.47% and are being marketed with spread price guidance of 11% to 12%.

In 2022, American Integrity’s cat bond issuance had a tranche of notes with an initial expected loss of 1.41% and they priced to pay a spread of 7%, so comparably the pricing appears higher here, in-line with other recent issuances.

You can read all about this new Integrity Re Ltd. (Series 2023-1) catastrophe bond and every cat bond deal in the Artemis Deal Directory.

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