Hannover Re seeks wind & quake retrocession from $100m 3264 Re cat bond

Hannover Re is back in the catastrophe bond market with an initial target to secure $100 million or more in retrocession covering US and North American peak perils on an industry-loss basis, from a 3264 Re Ltd. (Series 2025-2) transaction that is now in the market and being offered to investors, Artemis can report.

This will become the fifth catastrophe bond in the 3264 Re series for global reinsurance firm Hannover Re, as the company continues to tap the capital markets for its retrocession needs.

Hannover Re partners with capital market investors for its own retrocessional reinsurance needs and as a facilitator in the insurance-linked securities (ILS) market, with the 3264 Re issuances seemingly an example of protection buying for its own book.

Earlier this year, the reinsurer secured $175 million of worldwide peak peril retrocession through a 3264 Re Ltd. (Series 2025-1) cat bond deal, after which it also secured more cyber cloud outage cover through a private Cumulus Re (Series 2025-1) issuance in March.

For its latest catastrophe bond under the Bermuda based 3264 Re Ltd. vehicle, Hannover Re is focusing on securing more  retrocessional reinsurance for peak perils in the United States and Canada, we are told.

3264 Re Ltd. is set to offer a single tranche of Class A Series 2025-2 notes to cat bond investors, with the proceeds from their sale set to collateralize a reinsurance agreement to benefit sponsor Hannover Re.

The notes will provide Hannover Re with both multi-year per-occurrence coverage for northeast US named storms and also annual aggregate retrocessional reinsurance for North American earthquakes, running over three years and three risk periods for the agg sectionfrom June 1st, we understand.

Both sections of coverage will use an industry-loss trigger, with a franchise deductible in place for the aggregate quake coverage, and both named storm and quake being based on industry losses reported by PCS for personal, commercial and auto lines of business, sources said.

The North America named storm cover is for northeast and eastern states including the District of Columbia, Connecticut, Delaware, Georgia, Maine, Maryland, Massachusetts, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, South Carolina, Virginia, and Vermont, while the earthquake protection is for all 50 US states, DC and Canada.

Currently, the Class A Series 2025-2 notes that 3264 Re is set to issue are sized at $100 million.

The notes have an initial attachment probability of 4.22%, an initial base expected loss of 3.68% and are being offered to cat bond investors with price guidance in a range from 8.25% to 9%, we are told.

It’s good to see Hannover Re back and looking to continue adding to its retrocessional protection with the support of catastrophe bond investors.

You can read all about this new 3264 Re Ltd. (Series 2025-1) catastrophe bond from Hannover Re and every other cat bond issued in the Artemis Deal Directory.