German reinsurance company Hannover Re has facilitated issuance of two new private catastrophe bond transactions, a $15 million California quake focused LI Re (Series 2022-1) and $24 million Seaside Re (Series 2022-1) covering unknown U.S. property catastrophe risks.
Hannover Re continues to help investors to access reinsurance related risk and return in securitized form and cedents to access the capital markets through acting as a risk transformer and facilitator for private catastrophe bonds and insurance-linked securities (ILS).
Hannover Re has used its Bermuda domiciled reinsurance transformer vehicle Kaith Re Ltd. to issue both of these new private cat bonds for 2022, acting on behalf of its segregated accounts named LI Re and Seaside Re.
The first, an LI Re transaction, saw $15 million of notes issued through by Hannover Re’s segregated accounts vehicle, Kaith Re Ltd., acting on behalf of the segregated account named LI Re.
This $15 million LI Re 2022-1 private cat bond transforms and securitises underlying reinsurance related contract risks contained in the segregated account, and is due for maturity February 15th 2023, so it’s likely the underlying is a one-year reinsurance renewal arrangement.
Like previous LI Re private cat bonds, this latest LI Re 2022 deal provides an unknown cedent with collateralized reinsurance or retrocessional protection covering losses from California earthquake risks.
Previous years LI Re private cat bonds also securitized California earthquake risks, so it’s possible this is a renewal of sorts, although the last we saw was issued in 2019 so there may have been a break last year.
This $15m of LI Re Series 2022-1 private cat bond notes have now been listed on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities, having been sold to qualified institutional investors.
The second private cat bond to come to light that Hannover Re has facilitated, was also issued by the reinsurers Kaith Re Ltd. vehicle in Bermuda.
Hannover Re’s transformer vehicle Kaith Re Ltd. acted on behalf of its segregated account named Seaside Re to issue $24 million of 2022-1 notes that were then sold to investors.
The $24 million of Seaside Re 2022-1 notes were created through the transformation and securitisation of underlying reinsurance related contract risks contained in the segregated account Seaside Re and the notes are due for maturity January 15th 2023, so likely represent a one-year contract from the renewals.
As with all the Seaside Re private cat bond deals, this $24 million Seaside Re 2022 provides an unknown cedent with collateralized reinsurance or retrocessional protection covering losses from unknown US property catastrophe risks.
This $24m of Seaside Re Series 2022-1 private cat bond notes have been listed on the Bermuda Stock Exchange (BSX) as Section V – Insurance Related Securities and were sold to qualified institutional investors.
The underlying transactions for both of these private cat bonds are likely to be collateralized reinsurance or industry loss warranty (ILW) arrangements, as are most typical with a private cat bond arrangements. Further details of the exact nature of each transaction are unavailable at this time.
With these latest private insurance-linked securities (ILS) arrangements facilitated by Hannover Re, the global reinsurance firm demonstrates that it will continue to help ceding companies and capital market ILS investors connect to invest in and transfer risk.
Last year, Hannover Re facilitated $136.4 million of private catastrophe bonds using the Seaside Re segregated account of Kaith Re Ltd., which was almost double the $74.5 million facilitated in 2020.
The first LI Re private cat bond appeared in 2014, while the first Seaside Re came to light in 2017.
We’ve detailed as many of Hannover Re’s private cat bond issuances as we can in our Deal Directory and you can filter the list to view only private deals like this.
Adding these two new private cat bonds to the Silver Crane transaction we detailed yesterday takes 2022 private catastrophe bond issuance to $64 million so far.