Swiss Re Insurance-Linked Fund Management

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SageSure, SURE & Swiss Re hail largest catastrophe bond since Hurricane Ian


Having completed its new Gateway Re Ltd. (Series 2023-1) catastrophe bond transaction at a 78% upsized $355 million, coastal property insurance underwriting group SageSure, its SureChoice Underwriters Reciprocal Exchange (SURE) and facilitator Swiss Re have all hailed the fact this is the largest cat bond deal since hurricane Ian struck.

positive-smile-checkWe’d tracked this new catastrophe bond deal from SURE since first learning about it over one month ago.

When this new Gateway Re Ltd. cat bond was first presented to investors, the sponsor was seeking just $200 million of US named storm reinsurance protection from the issuance.

But thanks to very strong investor demand, as we explained a fortnight ago, the Gateway Re 2023-1 cat bond was upsized by 78% to provide SURE with $355 million of multi-year and collateralized reinsurance protection from the capital markets.

As we explained at that time, timing appears to have been extremely favourable for SURE’s latest and second catastrophe bond deal, with the company benefiting by securing very strong execution.

The execution is all the more impressive when you consider that most catastrophe bonds have seen their sizes reduced, static, or just very slight upsizes, while pricing has often leapt much higher during the marketing of a deal.

In the case of this Gateway Re 2023-1 cat bond from SURE, the issuance grew significantly and the pricing was finalised within guidance, albeit at the top-end of the marketed ranges.

More impressive still is the fact the cat bond market is still in recovery mode after hurricane Ian and that while there have been some inflows to cat bond funds, they are still not particularly significant.

The sponsors cited the “high levels of demand and widespread support from global insurance-linked securities (ILS) investors,” saying that, “The success of the execution speaks to the strength of SageSure and SURE’s reputation and track record.”

“We continue to place significant value on the multi-year and diversified source of reinsurance our catastrophe bond program provides,” Ed Konar, president of SURE explained. “Gateway Re is an essential part of our reinsurance structure and allows us to further the important work of protecting property owners in coastal markets.”

“We are excited to see decisive market validation from the global ILS community and appreciate the investor support that led to the bond’s significant upsize,” added Terrence McLean, CEO and co-founder of SageSure. “This transaction supports our ability to provide vital underwriting capacity for our producers in catastrophe-exposed markets.”

Swiss Re Capital Markets acted as the sole structuring agent and bookrunner for the successful placement of the Gateway Re 2023-1 catastrophe bond.

“Swiss Re Capital Markets is proud to continue our partnership with SageSure and SURE and to guide the largest cat bond issuance since Hurricane Ian,” Jean-Louis Monnier, the Chief Executive Officer of Swiss Re Capital Markets Corporation said.

“The impressive response from global investors despite challenging market conditions demonstrates a strong support for reputable sponsors committed to clean cat bond structures and a high level of transparency surrounding exposure growth and reporting,” Monnier added.

You can read all about this new Gateway Re Ltd. (Series 2023-1) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.

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