Cabrillo’s US Coastal insurers target lower pricing for new $100m Chartwell Re cat bond

The two US Coastal named insurance companies administered by Cabrillo Coastal General Insurance Agency continue to target $100 million in named storm reinsurance from its Chartwell Re Ltd. (Series 2026-1) issuance, but both insurers are aiming to capitalise on investor appetite and have lowered the price guidance for the notes, Artemis has learned.

Last May, New York domiciled US Coastal Insurance Company and Florida domiciled US Coastal Property & Casualty Insurance Company secured $330 million of named storm reinsurance across three tranches of notes issued under their debut catastrophe bond sponsorship, Chartwell Re 2025-1.

Both US Coastal insurers returned to the cat bond market earlier this month, seeking to expand on the role catastrophe bonds play in their reinsurance tower, with an initial target to secure $100 million of fully-collateralized reinsurance.

We have been told that target remains the same, but like most catastrophe bond sponsors, US Coastal Insurance Company and US Coastal Property & Casualty Insurance Company are seeking to lower the pricing of the risk interest spread it will pay for the coverage.

The Chartwell Re Series 2026-1 cat bond notes will provide catastrophe reinsurance to the two US Coastal insurers sponsoring the deal, on an indemnity trigger and per-occurrence basis, across a three year term and covering named storm losses.

The covered areas are the same hurricane exposed states as the first cat bond the insurers sponsored last year, that being the main states the two insurers underwrite business in, which are: Alabama, Florida, Mississippi, New Jersey, New York, Rhode Island, and Texas.

As we’ve explained before, New York and Florida are the states making the main contribution to the notes expected loss.

The still $55 million tranche of Series 2026-1 Class D notes that Chartwell Re is offering will have an initial attachment point at $65 million and exhaust at $120 million, giving them an initial attachment probability of 1.5%, and an initial expected loss of 1.32%.

Initially, these notes were offered to cat bond investors with price guidance in a range from 4.75% to 5.5%. That guidance has now been revised to a lower range of 4.25% to 4.75%.

A still $45 million tranche of Series 2026-1 Class E notes will also have an initial attachment point at $65 million and exhaust at $120 million, giving them an initial attachment probability of 7%, and an initial expected loss of 5.67%.

These notes were originally offered to cat bond investors with price guidance in a range from 12.5% to 13.25%. That guidance has also been revised to a lower and tighter spread range of 12.25% to 12.5%.

These US Coastal insurers appear to be prioritising price over size with its latest catastrophe bond sponsorship. However, they could still choose to upsize it after it has an indication of the final pricing, which can sometimes occur during the marketing phase of cat bonds.

As a reminder, you can read all about this new Chartwell Re Ltd. (Series 2026-1) catastrophe bond and almost every other cat bond deal ever issued in the Artemis Deal Directory.