Gothaer secures €100m Yardstick Re flood catastrophe bond at lower pricing

German insurer Gothaer Allgemeine Versicherungs AG has now secured its targeted €100 million of reinsurance limit to cover flood events in Germany through its debut catastrophe bond, as the Yardstick Re DAC (Series 2026-1) issuance has been priced below initial guidance, Artemis has learned.

Gothaer Allgemeine Versicherungs AG (Gothaer), a non-life property and casualty focused insurance company focused on private client and business coverage and part of the BarmeniaGothaer Group, made its debut in the catastrophe bond market for the first time earlier this month.

As we’ve explained before, Gothaer’s debut issuance, this Yardstick Re 2026-1 cat bond, marks the first catastrophe bond to ever come to market that is solely focused on flood risks in Germany.

Initially, Gothaer was looking to secure a €100 million source of collateralized flood reinsurance protection from cat bond investors with this Yardstick Re DAC (Series 2026-1) issuance.

In our first update on this deal, we reported that the size target had not been changed from the initial €100 million, however, Gothaer was looking to capitalise on investor appetites for risk by slightly lowering the pricing of the notes on this Yardstick Re 2026-1 issuance.

It’s important to remember that the pricing of this cat bond was particularly low at launch anyway, given the risk is extremely remote in expected loss terms for a property cat bond.

Now we’re told, the targeted €100 million size has been achieved, while the pricing of the notes has been finalised at the bottom of the slightly reduced range.

Yardstick Re DAC will now issue a €100 million tranche of Series 2026-1 Class A notes to investors, designed to provide insurer Gothaer with four years of reinsurance protection to cover losses from major flood events in German on an indemnity trigger and per-occurrence basis.

The €100 million tranche of Series 2026-1 Class A notes that Yardstick Re DAC will issue have an initial expected loss of 0.19%.

The notes were first offered to cat bond investors with price guidance for a risk interest spread of 2%, which was then later reduced to a range of 1.95% to 2%.

We’re now told the €100 million of notes have been priced to pay investors a spread of 1.95%, so at the bottom of the slightly reduced range.

This is a great result for Gothaer, with the company managing to successfully secure its targeted flood reinsurance limit at lower than anticipated pricing through its debut cat bond.

It also continues the strong momentum seen across the cat bond market this year, as a growing number of first-time sponsors tap into the capital markets for efficient and diversified reinsurance solutions.

As a reminder, you can read all about this Yardstick Re DAC (Series 2026-1) transaction and every other catastrophe bond deal in our extensive Artemis Deal Directory.