Hannover Re has continued its prolific level of private catastrophe bond activity around the reinsurance renewals with the completion and issuance of another two Seaside Re cat bond lites amounting to $40 million in the first week of January.
Prior to these two new Seaside Re cat bonds, Hannover Re had already facilitated and issued $122 million of private cat bonds through its Kaith Re Ltd. Bermuda domiciled segregated accounts reinsurance vehicle in December, all of which are listed in the Artemis Deal Directory.
Adding these two new transactions takes Hannover Re’s private cat bond activity to $162 million around this January 2019 reinsurance renewal, significantly up on the $107 million of transactions it facilitated at the renewal before.
For both, the reinsurance transformer vehicle Kaith Re Ltd. has acted on behalf of its segregated account named Seaside Re to issue the $30 million tranche of Series 2019-21 notes and $10 million tranche of Series 2019-22 notes, each of which collateralise an underlying reinsurance or retrocession agreement for the investors on the other side of the deal.
The Series 2019-21 and 22 notes issued by Seaside Re both have due dates of January 15th 2020, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most common with private cat bonds.
The Jan 15th 2020 due date is the same as all the recent Seaside Re transactions, suggesting they are all layers of the same program, most likely Hannover Re helping investors to access insurance-linked returns through its own retrocessional reinsurance program with this now growing series of securitised private cat bond notes.
The Seaside Re private cat bond program provides ILS investors with access to U.S. property catastrophe risks in cat bond lite securitised form, offering the potential for secondary liquidity and meeting certain investor mandates. As with all these deals, full details of the transaction and the underlying reinsurance or retrocessional coverage they provide are not available.