Swiss Re Insurance-Linked Fund Management

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Second event Gateway cat bond is efficient reinstatement capacity: Monnier, Swiss Re


The recently completed sponsorship of its debut second and subsequent event focused catastrophe bond, the $100 million Gateway Re Ltd. (Series 2023-2) deal, is a “necessary layer of additional protection during the 2023 Atlantic hurricane season,” SURE President Ed Konar has explained, while Swiss Re’s Jean-Louis Monnier said it represents efficient reinstatement capacity.

surechoice-elevate-catastrophe-bondAs Artemis has been reporting since early May, coastal property managing general underwriter SageSure was back in the catastrophe bond market seeking more hurricane reinsurance for its SureChoice and Elevate reciprocal exchanges.

We were first to report the upsizing and efficient pricing secured by SageSure and SURE with the latest catastrophe bond, as it grew by one-third to $100 million and priced below the initial guidance.

This insurance group has now sponsored four Gateway Re cat bond deals sponsored in just about 12 months, securing $730 million of collateralized reinsurance capacity from ILS investors through the issuances.

$580 million in capacity has now been secured for SageSure’s carrier partners this year alone.

“We are excited to see the continued support for SURE’s reinsurance program from the ILS investor community,” explained Ed Konar, president of SURE.

Adding, “The second and subsequent event catastrophe bond provides a necessary layer of additional protection during the 2023 Atlantic hurricane season.”

This Gateway Re 2023-2 catastrophe bond provides $100 million of cover against second and subsequent event losses in excess of a $70 million attachment point for named storms occurring during the 2023 hurricane season, across Alabama, North and South Carolina, Louisiana, Mississippi, and Texas.

Previous cat bonds from SageSure and SURE have been multi-year in nature.

Being a second and subsequent event cover, this effectively acts as a reinsurance layer that will reinstate cover after an event occurs that has eroded some of the reinsurance tower.

“Catastrophe bonds have become an important source of additional catastrophe risk capacity for SageSure and our carrier partners,” Terrence McLean, CEO and co-founder of SageSure said.

“As we’ve seen traditional reinsurance markets harden, we are grateful for the ongoing ILS investor support that enables us to provide underwriting capacity in challenging markets.”

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

“Swiss Re Capital Markets is proud to have led the placement of SURE and SageSure’s innovative second and subsequent event catastrophe bond solution, the third issuance this year by the Gateway Re franchise,” explained Jean-Louis Monnier, Global Head of ILS at Swiss Re.

“The success of the placement demonstrates that alternative capital can be an efficient source of reinstatement capacity and underlines the investor confidence in SURE, SageSure, and the Gateway Re franchise.”

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

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