Germany headquartered global reinsurance company Hannover Re has brought another private catastrophe bond transaction to market, with a $50 million Seaside Re (Series 2020-51) transaction now completed.
The first Seaside Re private cat bond for 2020 comes on the heels of a $10 million LI Re private insurance-linked securities (ILS) transaction that Hannover Re facilitated just a few days ago.
Hannover Re acts as a facilitator in the ILS and catastrophe bond market, helping ceding companies and investors to transact in securitised note form using its Kaith Re Ltd. Bermuda domiciled segregated accounts vehicle.
These Seaside Re cat bond lites are regular features of the ILS market now, with issuances from Hannover Re’s vehicle each year early 2017 now featured in our Deal Directory.
For this Seaside Re 2020-51 private cat bond issuance, Hannover Re’s reinsurance transformer vehicle Kaith Re Ltd. has acted on behalf of its segregated account named Seaside Re to issue the $50 million tranche of Series 2020-51 notes, which will provide the collateral to support an underlying reinsurance or retrocession agreement for the investors on the other side of the deal.
The Series 2020-51 notes issued by Seaside Re both have a due date of January 15th 2021, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction, as are most commonly seen with private cat bonds.
The Jan 15th due date is the same as other recent Seaside Re cat bond transactions, suggesting they support layers of the same program, most likely Hannover Re helping investors to access insurance-linked returns through its own retrocessional reinsurance program, through this now growing series of securitised private cat bond notes.
The Seaside Re private cat bond program offers a way for ILS investors to access certain U.S. property catastrophe risks in cat bond lite securitised form with the potential for secondary liquidity and meeting certain investor mandates.
As with all these private ILS deals, full details of the transaction and underlying reinsurance or retrocessional coverage they provide are not available to us.