Selective secures $325m of reinsurance from debut cat bond High Point Re

Selective Insurance, the US property and casualty insurer, has now priced its debut catastrophe bond issuance and secured the 62.5% upsizing of the deal to benefit from $325 million in reinsurance thanks to the High Point Re Ltd. (Series 2023-1) transaction.

As Artemis has been reporting, Selective entered the catastrophe bond market for the first time at the beginning of November, seeking $200 million or more in multi-peril collateralized reinsurance capacity from the capital markets with this High Point Re 2023-1 cat bond.

Last week, we learned that Selective’s target for its first cat bond had increased, with an upsizing of up to 62.5% seen as possible, as the insurer’s target rose to up to $325 million.

At the same time, we also learned that the price guidance had been raised to the top-end of the initial range.

We’ve now learned that the notes were eventually priced late on Friday last week and that Selective has secured the upsizing to $325 million, while the spread was finalised at the upper-end of guidance.

So, with this High Point Re Ltd. cat bond, Selective is now going to benefit from a $325 million three year source of reinsurance against losses from U.S. named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impacts and volcanic eruptions, all on an indemnity and per-occurrence basis, US wide but excluding the key cat exposed states of California, Florida, Louisiana and Texas.

The now confirmed to be $325 million of High Point Re Series 2023-1 Class A cat bond notes that are being issued, come with an initial base expected loss of 0.77%.

The notes were first offered to investors with spread price guidance in a range from 5% to 5.75%, which later was fixed at the upper-end of 5.75% and we’re now told that is where the notes have been priced.

All of which makes for a strong result for Selective Insurance, in securing significantly more reinsurance than its initial target, for its first foray to the catastrophe bond market.

While this also further demonstrates that cat bond investors are keen to maintain a certain level of return, with multiples remaining elevated compared to a couple of years ago.

You can read all about this new High Point Re Ltd. (Series 2023-1) catastrophe bond and every cat bond deal ever issued in our Artemis Deal Directory.