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Kin delighted with investor response to new Hestia Re cat bond


Kin Insurance, the direct-to-consumer and fast-growing insurtech, is clearly delighted with the investor response to its successful placement of a $100 million Hestia Re Ltd. (Series 2023-1) catastrophe bond deal, with an expanded investor base one of the notable mentions.

kin-insurance-logoAs we’ve been reporting, Kin returned to the catastrophe bond market in February, seeking $100 million in fully-collateralized and multi-year Florida named storm reinsurance protection from the capital markets for its reciprocal carrier, the Kin Interinsurance Network.

As we then reported back at the middle of March, Kin successfully secured the new Hestia Re 2023-1 catastrophe bond to provide the targeted $100 million of reinsurance protection, benefiting from strong execution as the spread was finalised just over 11% below the initial mid-point of price guidance for the deal.

Now, Kin has commented on the new cat bond issuance and it’s clear the response from investors, especially in helping to lower the pricing on the deal, has delighted the insurtech.

“With our latest catastrophe bond issuance, Kin reaffirms its commitment to the capital markets,” Angel Conlin, chief insurance officer at Kin explained. “We are proud to have once again successfully expanded our investor base, and to have established new relationships with key partners who share our vision for the future. We believe these partnerships will be instrumental in achieving our future goals.”

“Kin is pleased to see investors recognize the value of our technology and direct-to-consumer model,” added Jerry Fadden, Kin’s chief financial officer. Hestia Re remains a strategically important capital management tool; we look forward to continuing our dialogue with investors and seeing how the capital markets evolve with our risk transfer objectives.”

Kin noted that “Investor demand allowed the transaction to tighten by 175 basis points from the wide end of the initial price guidance.”

As we’d reported, the initial price guidance was for a spread in a range from 10.5% to 11.5%, but in the end this Hestia Re 2023-1 cat bond priced to pay investors a spread of 9.75% over the risk-free return of the collateral.

Howden Tiger Markets & Advisory and Swiss Re Capital Markets acted as joint structuring agents and joint bookrunners for this new Kin cat bond.

“In this dynamic market environment, Kin’s performance, transparent communication with stakeholders, and proven technology-driven advantage drove a phenomenal result,” stated Mitchell Rosenberg, managing director of ILS at Howden Tiger Capital Markets & Advisory. “We’re pleased to advise Kin on their market-leading Cat Bond program and are confident both the capital and traditional markets will continue to grow their support for Kin.”

“Swiss Re Capital Markets is pleased to partner with Kin to facilitate another successful transaction,” Andras Bohm, head of ILS structuring for the Americas at Swiss Re Capital Markets also said. “Investors appreciated Kin’s return to the ILS market, and we are proud to be a part of Kin’s strategy to grow its access to alternative capital through Hestia Re.”

Kin had secured its debut $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond cover back in April 2022.

So now, the insurtech has $275 million of multi-year reinsurance limit from the capital markets available through Hestia Re cat bonds.

You can read all about the Hestia Re Ltd. (Series 2023-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.

Register today for ILS Asia 2023, our next insurance-linked securities (ILS) market conference. Held in Singapore, July 13th, 2023.

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