SageSure hails use of PCS county-level reporting for new catastrophe bond

SageSure, the specialist independent managing general underwriters of property catastrophe exposed insurance, has hailed its use of the Property Claim Services (PCS) county-level catastrophe loss reporting in the trigger of its newest $50 million Gateway Re Ltd. (Series 2023-3) catastrophe bond.

The company said that by using the PCS county-level catastrophe loss reporting in the catastrophe bond industry loss trigger, it has greatly enhanced the ability to manage basis risk in the instrument.

At the same time, the county-level trigger structure also helps SageSure and its captive reinsurance company Anchor Re, which is the direct beneficiary of the retrocessional cover from the cat bond, to better manage their capital needs.

An additional benefit of the PCS county-level industry loss trigger is the provision of greater transparency to investors in the cat bond, SageSure further explained.

As we have been reporting since late June, SageSure returned to the catastrophe bond market for the fifth in its Gateway Re catastrophe bond series.

The MGU already benefits from three Gateway Re Ltd. issuances that protect its reciprocal exchange underwriting vehicles, the $150m Gateway Re Ltd. (Series 2022-1), the $355m Gateway Re Ltd. (Series 2023-1), the $100m Gateway Re Ltd. (Series 2023-2), and also one $125m Gateway Re II Ltd. (Series 2023-1) issuance for two other SageSure-linked carriers.

This newest Gateway Re 2023-3 cat bond saw the MGU taking a different approach, securing a source of capital markets backed and county-weighted aggregate retrocessional protection, secured via its captive reinsurance vehicle Anchor Re.

This latest Gateway Re cat bond was eventually priced roughly 7% below the mid-point of the initial spread guidance range.

The multi-year retrocessional protection ultimately covers losses from a series of qualifying named storms in a single year for SageSure’s carrier partners SURE and SafePort, above a pre-defined industry loss trigger that is calculated on a county-level basis, using the PCS reported data.

SageSure noted that the new cat bond is “unique in the insurance-linked securities (ILS) market” because of the Property Claim Services (PCS) county-level catastrophe loss reporting in its trigger.

“We’re excited to see strong investor support for Anchor Re’s first catastrophe bond,” explained Travis Lewis, Director of Anchor Re. “Anchor Re was formed to maximize capital and capacity efficiency, and this innovative catastrophe bond further bolsters the support it can provide for SURE and SafePort’s reinsurance programs.”

“Since 2022, SageSure has been championing the essential role of capital markets in our carrier partners’ reinsurance placements,” added Terrence McLean. “We greatly appreciate the ILS investor support for our partners’ reinsurance programs that enable SageSure to continue innovating in challenging property insurance markets.”

Swiss Re Capital Markets acted as the sole structuring agent and bookrunner for this latest Gateway Re cat bond.

“Swiss Re Capital Markets is proud to have structured and placed SageSure’s innovative second and subsequent event cover for its captive reinsurer,” Jean-Louis Monnier, Head of ILS at Swiss Re commented.

“This fourth issuance under the Gateway Re program is designed with structural features that are accretive to ILS investors, while it provides valuable sideways coverage for Anchor Re.

“The continued success of the franchise reaffirms SageSure’s presence as a prominent ILS sponsor and investors’ confidence in SageSure and the Gateway Re program.”

You can read all about this new Gateway Re Ltd. (Series 2023-2) catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.