Quercus II Re cat bond demonstrates Groupama’s capacity for innovation across ILS: Lacoste

Groupama’s sponsorship of its latest catastrophe bond, the €120 million Quercus II Re DAC issuance, demonstrates the firm’s capacity for innovation and highlights the importance of partnerships across the insurance-linked securities (ILS) space, according to Pierre Lacoste, Reinsurance Director of Groupama Group.

French mutual insurance and reinsurance company Groupama’s latest catastrophe bond also marks the first cat bond on the ILS market that’s specifically dedicated to hail risk.

The cat bond is structured as an aggregate indemnity reinsurance cover, aiming to protect annual losses on property and motor portfolios in metropolitan France related to this climate peril.

As Artemis previously reported, Groupama made its return to the catastrophe bond market in November, with its initial target being to secure €100 million in reinsurance against losses from convective storms in France thought this Quercus II Re cat bond deal.

In our first update on the deal, we learned that Groupama’s target was raised, with then up to €120 million of reinsurance protection being sought, while the pricing for the cat bond was updated at the mid-point of guidance.

Then, in mid-December, we reported that Groupama had successfully priced its new Quercus II Re DAC catastrophe bond to secure the company’s 20% upsized target of €120 million of fully-collateralized convective storm reinsurance protection from the capital markets.

This new cat bond provides Groupama and certain subsidiaries of the company with multi-year, indemnity triggered, annual aggregate reinsurance protection against losses from convective storms affecting France across two annual risk periods from January 2026 through to the end of 2027.

It’s also worth highlighting, that this Quercus II Re catastrophe bond marks the first in the market since 2010 that will solely cover the severe convective storm peril.

Commenting on the sponsorship, Pierre Lacoste, Reinsurance Director of Groupama Group, said: “This issuance, a world first, demonstrates the group’s capacity for innovation and highlights the importance of partnership relations with the ILS market, which enable Groupama to structure effective coverage against Hail losses.”

Coverage for the catastrophe bond was placed and structured by Aon Securities, the specialist investment banking and insurance-linked securities (ILS) broker-dealer unit of the global insurance and reinsurance broker.

As a reminder, you can read all about this Quercus II Re DAC catastrophe bond and every other cat bond deal in the Artemis Deal Directory.