Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Gateway Re cat bond an “essential” reinsurance complement: SURE President Konar


The recently completed $150 million Gateway Re Ltd. (Series 2022-1) debut catastrophe bond transaction from SURE, or the SureChoice Underwriters Reciprocal Exchange, is seen as an “essential” piece of the reinsurance tower and a complement to traditional coverage, according to SURE President Ed Konar.

surechoice-insurance-logoAs we explained last month, SURE secured $150 million of US wind focused catastrophe reinsurance from capital markets investors with the Gateway Re catastrophe bond, its first venture into the cat bond market.

The issuance was well-received and achieved its targeted size, but given spread widening in the cat bond market the coupon moved to the upper-end of guidance at close.

But, the coverage is seen as valuable by SURE and its parent SageSure, through which SURE’s coastal property insurance policies are exclusively available, providing it with indemnity-based hurricane and named storm reinsurance protection in Alabama, Louisiana, Mississippi, and Texas across three full Atlantic hurricane seasons.

“Our catastrophe bond is an essential part of our reinsurance structure and complements a tower backed by industry-leading reinsurers,” explained Ed Konar, president of SURE.

“We are proud to have successfully sponsored our first catastrophe bond that protects our business, backs our strategic growth in coastal markets, and demonstrates strong investor support for our mission.”

In announcing the deal today, SURE said that investors were encouraged by SURE and SageSure’s record of outperformance in managing portfolio risks, which helped the deal achieve its target size and price within guidance (albeit at the top-end).

That comes in an environment where many cat bonds are now pricing far higher and some being pulled from issuance.

Timing may also have assisted, as SURE hit the market just prior to the significant spread widening, which has increased in the last fortnight (the Gateway cat bond launched over one month ago and was priced / finalised on April 22nd).

“SURE is integral to the SageSure ecosystem. Our partnership empowers us to deliver on our commitment to producers to provide stable, abundant capacity in challenging markets,” Terrence McLean, CEO and co-founder of SageSure added. “We are excited to continue building a preferred book of business with SURE made possible by our superior underwriting and segmentation.”

Swiss Re Capital Markets and TigerRisk Capital Markets & Advisory, the investment banking and insurance-linked securities (ILS) arms of the global reinsurance giant and reinsurance risk capital advisor, acted as joint structuring agents and joint bookrunners on the transaction.

“Swiss Re Capital Markets is proud to have had the opportunity to guide the SageSure and SURE teams through their first catastrophe bond issuance and to assist in establishing the Gateway Re capital markets platform,” Andras Bohm, Head ILS Structuring for the Americas of Swiss Re Capital Markets explained.

“Successfully securing meaningful support from ILS investors in prevailing market conditions is a clear reflection of the team’s track record of balancing growth with outstanding underwriting results.”

Philipp Kusche, Global Head of ILS and Capital Solutions at TigerRisk Capital Markets & Advisory, also said, “We are proud to support SURE and SageSure in their inaugural catastrophe bond transaction, which follows on SageSure’s proven success at accessing capital markets and in executing on their strategic initiatives, including the establishment of SURE itself.

“It has been exciting to work with such a quality team in bringing SageSure and SURE’s sophisticated underwriting capability to the capital markets. The transaction has been very well received and achieved its target size amidst challenging market conditions.”

You can read all about this new Gateway Re Ltd. (Series 2022-1) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.

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