Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Four Kane SAC private ILS or cat bond deals listed in Bermuda


Four new private insurance-linked security (ILS) or catastrophe bond deals, totaling $125.84m, issued through global independent insurance manager Kane’s private ILS platform, the Kane SAC Limited Note Program, have listed in Bermuda.

The four private ILS transactions, all of which involve a named segregated account from the Kane SAC Limited issuance vehicle, total $125.84m in total size. All four of the segregated account ILS deals have a maturity date listed as the 12th January 2016, which suggests that all are a renewal transaction from January which have been fully-collateralized and then transformed by Kane to a securitised format.

The four segregated account series of notes were listed on the Bermuda Stock Exchange on the same day, the 14th of January 2015, which suggests they likely all come from the same source ultimately. All have been listed under the BSX’s listing classification as ‘Section V – Insurance Related Securities’.

The four segregated account private ILS or cat bond deals, which together total $125.84m, are:

  • Troon Segregated Account – $27.53m
  • Hereford Segregated Account – $16.82m
  • Muirfield Segregated Account – $26.68m
  • Exeter Segregated Account – $54.81m

We cannot identify the source of the deals at this time, however it is likely that these involve an ILS fund or manager, or reinsurer operated third-party capital unit, which has underwritten the four transactions on a fully-collaterallized basis and then opted to use the Kane SAC platform to transform them to a liquid, transferable security form.

This would likely be to meet the mandate of an ILS investor or fund which requires its invested assets to be in a liquid or transferable form, as a securitisation, rather than simply as a collateralized reinsurance contract. The segregated account cells typically contain a single reinsurance contract participation, likely from the January renewals in the case of these private ILS deals.

As ever these private ILS transactions come with little in the way of information, so at this time we cannot confirm whether they are property catastrophe reinsurance linked or not. The use of these private ILS issuance platforms is increasing however, likely as a response to ILS investors need for higher yielding securitised notes than have been available in the main catastrophe bond market recently.

At this time we haven’t added these transactions to our Deal Directory, but we may do so in the future as more information becomes available.

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