Kin secures $335m of reinsurance making Hestia Re 2026-1 its largest cat bond yet

Kin Insurance, the direct to consumer insurtech, has now successfully priced its new Hestia Re Ltd. (Series 2026-1) catastrophe bond issuance, which has secured the company its largest amount of cat bond limit yet at $335 million of fully-collateralized named storm reinsurance, Artemis can report.

Kin came back to the catastrophe bond market in March for its fourth catastrophe bond under the Hestia Re program.

This new Hestia Re 2026-1 cat bond also sees Kin expanding its target for reinsurance coverage from the capital markets, with this deal set to become the first to provide the insurer with reinsurance protection beyond the state of Florida.

Initially the company was targeting a $300 million source of protection from this new Hestia Re Ltd. 2026-1 offering.

But as we explained in our first update on the deal, Kin set a new target of between $325 million and $335 million of reinsurance limit.

In a second update, we reported that the size target for the issuance appeared to have been fixed at $335 million, so the upper end of the revised target size.

At the same time, during the marketing of this Hestia Re 2026-1 cat bond, the pricing for three of the four tranches of notes on offer reduced below the initial guidance levels, while the fourth and riskiest tranche of one-year discount notes saw the price effectively rise.

Now, we can report that Kin Insurance has secured the upsized target of $335 million of reinsurance from its fourth catastrophe bond sponsorship, with the pricing finalised below guidance in most cases.

It makes this Kin’s largest cat bond it has sponsored to-date, as well as the broadest in terms of the reinsurance protection it will provide to the company.

Read about all of Kin’s catastrophe bonds in our Deal Directory.

Kin’s Bermuda based special purpose insurer (SPI) will now issue four tranches of Series 2026-1 notes, that will be sold to investors and the proceeds used to collateralize reinsurance agreements between the SPI and ceding company.

The ceding entities are initially the Kin Interinsurance Network and the Kin Interinsurance Nexus Exchange. But, as we’ve explained in previous articles, Kin will be able to add additional covered cedents should it introduce further underwriting entities during the term of the cat bond.

All four tranches of Hestia Re 2026-1 cat bond notes will provide Kin with a $335 million source of fully-collateralized named storm reinsurance, on an indemnity trigger and per-occurrence basis, across risk periods beginning from June.

Across the four tranches of Hestia Re 2026-1 cat bond notes, the largest component of coverage will be Florida named storm reinsurance, with one tranche aiming for broader coverage across a number of states excluding Florida which is a first for the company.

A $100 million tranche of Hestia Re Series 2026-1 Class A notes have an initial base expected loss of 2.86%. These notes were originally offered to cat bond investors with price guidance in a range from 8.25% to 9%, which first fell to 7.5% to 8.25%, but then fell again to between 7% and 7.50%. We’re now told the Class A notes priced to pay investors an initial risk interest spread of 7%, so the bottom-end of twice reduced guidance.

A $100 million tranche of Class B notes have an initial base expected loss of 3.67%. These notes were first offered to investors with price guidance in a range from 10% to 11%, which then fell to 9.5% to 10%, and fell again to a tighter spread of 9.25%-9.50%. The Class B notes have also priced at the lowest-end of revised guidance, to pay investors a risk interest spread of 9.25%, we understand.

The Class C tranche of notes were originally $25 million in size, but upsized to $35 million. The Class C notes are riskier and will only provide protection over a one year term and these are the discounted notes. The Class C notes come with an initial base expected loss of 13.09%. They were first offered to cat bond investors with price guidance of between 74% and 75% of par, but this was revised to pay investors 74% of par, so the top of initial guidance, which is where we are told they have now been priced.

Finally, what was originally a $75 million tranche of Class D notes were upsized to $100 million in size and have an initial base expected loss of 2.27%. These notes were at first offered to cat bond investors with price guidance in a range from 6.25% to 7%, which first fell to 5.75% to 6.25%, and was later fixed at 5.75%, which is where the risk interest spread has now priced (again, the lowest-end of revised guidance).

Kin seemingly sought to optimise its latest catastrophe bond sponsorship for both size and price, securing more protection than it had initially targeted while in the main pricing the notes below their guidance, a strong result for the insurer.

As a reminder, you can read all about the Hestia Re Ltd. (Series 2026-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.