Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Slide’s debut Purple Re cat bonds pricing shifts towards upper-end


Demonstrating that the catastrophe bond market is not softening endlessly, as some might believe based on the recent trend for pricing down, the price guidance for property insurtech Slide Insurance Company’s debut Purple Re Ltd. (Series 2023-1) cat bond has been adjusted towards the upper-end of guidance, we understand.

slide-insurance-logoPrices have generally been coming in lower than spread guidance mid-points for many of the catastrophe bond deals issued in the last month or so, leading to speculation that softening has begun in the cat bond market.

It’s still too early to tell whether pricing is simply correcting from a level that may actually have been set too high, to something more sustainable.

Or whether softening could become more persistent in insurance-linked securities (ILS) and reinsurance more broadly. Time will tell.

But, this latest cat bonds price adjusting upwards demonstrates that there is still ample discipline in the market and that ‘lower’ is not the only pricing trend to be seen in the market at this time, with investors still demanding adequate returns to invest in risks.

Slide Insurance Company, the full-stack homeowners property insurtech founded by former Heritage CEO Bruce Lucas, entered the catastrophe bond market last month seeking a debut $100 million Purple Re cat bond issuance to provide named storm reinsurance protection.

Purple Re Ltd. is issuing a $100 million Series 2023-1 Class A tranche of notes to provide Slide with three-years of named storm reinsurance protection for the states of Florida and South Carolina, on an indemnity trigger and per-occurrence basis.

The single tranche of Class A notes being issued by Purple Re Ltd. are still $100 million in size, we understand from sources.

The notes will have an initial base expected loss of 1.36% and were first offered to cat bond investors with spread pricing guidance in a range from 11.5% to 12.5%.

But we’re now told that the price guidance has been narrowed and lifted towards the upper-end, with new guidance offered of 12.25% to 12.5%.

As a result, the Purple Re 2023-1 cat bond notes look set to be priced in the upper-half of initial price guidance.

You can read all about this new Purple Re Ltd. (Series 2023-1) catastrophe bond and over 900 other cat bond transactions in our extensive Artemis Deal Directory.

Register today for ILS Asia 2023, our next insurance-linked securities (ILS) market conference. Held in Singapore, July 13th, 2023.

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