Global reinsurance company Hannover Re has facilitated more private catastrophe bond transactions around this Janaury 2021 renewals, with the firms Kaith Re transformer having issued $76.4 million of Seaside Re cat bond lite notes, across seven transactions.
These are the first Seaside Re private cat bond issuances to come to light in a year and given the amount only totals $76.4 million so far, we suspect there may be a few more to come in the coming days.
There were ten Seaside Re 2020 transactions around last January’s reinsurance renewals totalling some $151.5 million of risk securitized and notes sold to insurance-linked securities (ILS) investors.
The year before there were nine Seaside Re 2019 private cat bond arrangements, totalling $152 million of risk transferred and securitized.
So the 2021 issues from Seaside Re are currently running far short of the two previous years.
Hannover Re continues to play a key facilitation role in helping ceding companies to gain access to capital market investors through transactions structured in catastrophe bond lite form, as well as in facilitating investor access to cedents, or its own, portfolios of reinsurance risks.
For 2021, Hannover Re’s transformer vehicle Kaith Re Ltd. has acted on behalf of its segregated account named Seaside Re to issue seven tranches of private cat bond notes that we’ve seen so far.
Totalling $76.4 million, these break down as: $23.9m of Seaside Re (Series 2021-1) notes; $3.75m of Seaside Re (Series 2021-11) notes; $5.75m of Seaside Re (Series 2021-12) notes; $4m of Seaside Re (Series 2021-21) notes; $4m of Seaside Re (Series 2021-22) notes; $5m of Seaside Re (Series 2021-23) notes; and $30m of Seaside Re (Series 2021-31) notes.
The proceeds from the sale of each tranche of notes to cat bond investors will have been used as collateral to support an underlying reinsurance or retrocession agreement for whichever ceding re/insurer that is the ultimate beneficiary of this protection.
That could be Hannover Re of course, who may utilise the Seaside Re program to enable investors to access its retro program in a securitized, cat bond like manner, but we can’t be sure.
Each of the tranches of 2021 notes issued by Seaside Re are exposed to U.S. property catastrophe risks and have a due date of January 15th 2022, so likely represent a one year collateralized reinsurance or industry loss warranty (ILW) transaction entered into around the January 2021 renewals, as are most commonly seen with private cat bonds.
Hannover Re’s Seaside Re private catastrophe bond program provides ILS investors with a mechanism to access certain U.S. property catastrophe risks in cat bond lite securitised form, with the potential for secondary liquidity and ability to meet certain of their investor and fund mandates.
As with all private ILS and cat bond lite deals, the full details of the transaction and underlying reinsurance or retrocessional coverage they provide are not available to us.
You can read all about these Seaside Re private catastrophe bonds in our extensive Deal Directory and we’ll update you should any more come to light.