Catastrophe bonds and insurance-linked securities news

The government of Jamaica is keen to share its experience as a catastrophe bond sponsor and wants to encourage other nations in the region to consider joining it in sponsoring a Caribbean catastrophe bond, to cover multiple countries, a report states.

The African Risk Capacity (ARC) has selected reinsurance broker Gallagher Re to assist it with its own risk transfer needs, with the design of alternative risk transfer mechanisms, such as insurance linked securities (ILS) part of a development plan for its portfolio hedging and risk transfer arrangements.

The California Earthquake Authority (CEA) has now secured and priced its new Ursa Re Ltd. (Series 2023-1) catastrophe bond to provide it an upsized $200 million of reinsurance, while on average the spreads settled around 10% below the initial mid-point of guidance.

Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, has increased the target size of its new Japanese earthquake catastrophe bond Nakama Re Ltd. (Series 2023-1) to as much as $275 million.

The Gateway Re II Ltd. (Series 2023-1) catastrophe bond, that will provide its reinsurance protection to two more of the insurance carriers linked to coastal property managing general underwriter SageSure, is set to upsize to $125 million, while its pricing has tightened towards the lower-end of guidance.

The Texas Windstorm Insurance Association (TWIA) has now secured double its initial target for reinsurance from its new 144a Alamo Re Ltd. (Series 2023-1) catastrophe bond, with the issuance having its pricing fixed at $500 million in size, with a spread around 7% lower than the mid-point of initial guidance.

Catastrophe bonds, as an asset class exhibiting the rare property of price moves that are independent of broader financial markets, can be considered “the only true source of diversification,” according to Swiss private bank Banque Bonhôte & Cie.

US primary insurance giant State Farm has been back in the catastrophe bond market for additional capital markets supported catastrophe reinsurance in recent weeks, securing $450 million of protection across two series of notes issued, to provide multi-peril coverage to the company.

Catastrophe bond funds in the UCITS format have reported a record start to the year, delivering almost 4% in returns on average in the first-quarter of 2023, according to the latest data from the Plenum CAT Bond UCITS Fund Indices.

The California Earthquake Authority (CEA) has lifted its target for its new Ursa Re Ltd. (Series 2023-1) catastrophe bond transaction, with now $200 million of reinsurance sought, while the pricing guidance has dropped for both of the tranches being issued.