Swiss Re Insurance-Linked Fund Management

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LI Re 2015-1 private cat bond issued via Kaith Re by Hannover Re


Hannover Re has completed the issuance of another LI Re private catastrophe bond (or cat bond lite), a $3.75m LI Re (Series 2015-1), using its Kaith Re Ltd. segregated accounts vehicle, as the reinsurer facilitates another transaction for an unknown sponsor.

It’s the third LI Re transaction, following on from LI Re (Series 2014-1) on October 2014 and LI Re (Series 2014-2) in December 2014. Hannover Re established the LI Re bond program segregated account structure last year. Since then the German reinsurance firm has been acting as a transformer and facilitator for private cat bond issues through the securitization of segregated cells of its Bermuda segregated accounts insurer Kaith Re Ltd.

In this latest LI Re private cat bond, LI Re (Series 2015-1), $3.75m of notes have been issued by Kaith Re Ltd., acting on behalf of its segregated account LI Re.

As with the previous deals it sees Hannover Re working on behalf of a cedent and likely a single investor as a transformer and private cat bond service provider, taking a collateralized reinsurance contract and securitizing it through Kaith Re.

The $3.75m of Series 2015-1 notes issued in this private cat bond deal have a due date of 30th April 2016, suggesting it is an April renewal deal. As with the other LI Re private cat bonds we assume that these cover property catastrophe risks, but details of the exact nature of the transaction are unavailable.

Hannover Re continues to see the insurance-linked securities (ILS) market positively and seeks to act as a facilitator and intermediary to aid smaller reinsurance cedents and investors to transform risks into liquid, securitized catastrophe bond form.

The private cat bond LI Re (Series 2015-1) has been added to the Artemis Deal Directory for completeness, however it will not be fully included in all of our catastrophe bond and ILS market statistics due to the lack of available information.

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