Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Korean Re enters cat bond market with $75m Solomon Re US multi-peril deal


Korean Re, the global reinsurance company headquartered in the country of its name, is the latest debut entrant to the catastrophe bond market that will benefit from capital market coverage in 2023, thanks to a new Solomon Re Ltd. (Series 2023-1) issuance that targets $75 million or more in US multi-peril catastrophe retrocession.

korean-re-logoIt’s further evidence of how attractive the catastrophe bond market is for those seeking reinsurance and retrocession at this stage of the year, with market conditions encouraging yet another new entrant to venture forwards to benefit from protection via a cat bond deal.

A Bermuda based company, Solomon Re Ltd. will issue a series of catastrophe bonds that will provide the capital for the protection, sources told Artemis.

For its first, Solomon Re Ltd. will issue a single, currently $75 million tranche of Series 2023-1 Class A notes, that will be sold to investors and the proceeds used to collateralize a retrocession agreement between the issuer and Hannover Re, with the global reinsurer fronting the capital markets.

That protection will then be passed on to Korean Re through a reinsurance contract between Hannover Re and the ultimate beneficiary.

The protection will be against certain losses from US named storms and earthquakes, over a three-year term to the end of May 2026, we’re told.

The Solomon Re 2023-1 cat bond will therefore provide capital to support Korean Re with per-occurrence retro coverage, structured on an industry loss trigger basis, via a reinsurance agreement with Hannover Re.

The coverage spans a layer from an equivalent attachment of $110 million and exhausts at $285 million, we’re told.

That gives the $75 million or more in Series 2023-1 Class A notes that Solomon Re Ltd. will issue an initial attachment probability of 2.22%, an initial expected loss of 0.93% and the notes are being offered to cat bond investors with spread guidance priced in a range from 5.25% to 6%, we’ve learned.

Cat bond deals are coming thick and fast now and already June is shaping up to be another strong month of issuance.

You can read all about this Solomon Re Ltd. (Series 2023-1) catastrophe bond for Korean Re and every cat bond transaction ever issued in the extensive Artemis Deal Directory.

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

Artemis ILS Asia 2023 - Insurance-linked securities conference in Singapore

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.