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Hannover Re cat bond vehicle renews $10m California quake deal


Hannover Re, the German reinsurance company, has facilitated a renewal of a $10 million private catastrophe bond exposed to California earthquake risks, using its Kaith Re segregated accounts vehicle.

hannover-re-logoThe $10 million LI Re (Series 2019-1) private cat bond or cat bond lite transaction was completed last week and the issued notes listed on the Bermuda Stock Exchange (BSX).

It’s the latest private insurance-linked securities (ILS) arrangement facilitated by Hannover Re, as it continues to help ceding companies and capital market ILS investors connect to transfer risk.

The transaction saw $10 million of notes issued through reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., acting on behalf of its segregated account named LI Re.

This segregated account LI Re 2019-1 private cat bond transforms and securitises underlying reinsurance related contract risks contained in the account, and is due April 12th 2021.

This latest LI Re private cat bond deal provides an unknown cedent with collateralized reinsurance or retrocessional protection covering losses from California earthquake risks.

The underlying transaction will be a one year collateralized reinsurance or industry loss warranty (ILW) deal, as are most typical with these private cat bond arrangements. Further details of the exact nature of this transaction are unavailable at this time.

We assume this is a renewal of the LI Re 2018-1 private cat bond, which also securitised California earthquake reinsurance risks, and was due around the same time in April. The underlying risks are detailed further in a reinsurance agreements that is unavailable to us.

This $10m of LI Re Series 2019-1 private cat bond notes that have been issued through Kaith Re Ltd. are now listed on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities.

We’ve added this new $10 million LI Re (Series 2019-1) private cat bond to the Artemis Deal Directory and what information we have will be included in all of our catastrophe bond and ILS market statistics.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

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