The Hanover returns for fourth Commonwealth Re cat bond with $100m initial target

The Hanover Insurance Group, Inc. is back in the catastrophe bond market looking to sponsor its fourth issuance, with an initial target to secure at least $100 million of US-wide multi-peril reinsurance protection from a Commonwealth Re Ltd. (Series 2026-1) transaction, Artemis can report.

Previously, The Hanover has sponsored three successful catastrophe bond issues under the Commonwealth Re program.

In 2022 and 2023 the first two Commonwealth Re cat bonds provided The Hanover fully-collateralized named storm reinsurance across just US northeast states.

In 2025 the insurer returned and secured its first multi-peril reinsurance from the cat bond market, with the $200 million Commonwealth Re Ltd. (Series 2025-1) deal.

Now the insurer has returned, looking to extend the multi-peril reinsurance it receives from the catastrophe bond market, initially seeking $100 million of limit with this Commonwealth Re Series 2026-1 offering, Artemis has learned.

You can read about all of The Hanover’s catastrophe bonds by filtering our Deal Directory by sponsor.

The Hanover Insurance Group is again using its Bermuda-based special purpose insurer Commonwealth Re Ltd. for its fourth catastrophe bond sponsorship, seeking $100 million in US-wide multi-peril and multi-year reinsurance protection from the capital markets, on a fully-collateralized basis.

Commonwealth Re Ltd. will issue a single tranche of Series 2026-1 Class A notes that are designed to provide reinsurance to The Hanover and subsidiary companies, covering the perils of US named storm, earthquake, severe thunderstorm, winter storm and wildfire, we are told.

The protection will be on an indemnity trigger and per-occurrence basis, with the reinsurance running across three years from July 1st through to the end of June 2029.

The currently $100 million of Series 2026-1 Class A notes that Commonwealth Re is offering to investors would attach their reinsurance above an initial attachment point of $1.1 billion of losses and exhaust their coverage at $1.25 billion in the reinsurance tower, sources said.

As a result, the $100 million or more in Class A notes will have an initial attachment probability of 1.3%, an initial base expected loss of 1.18% and they are being offered to investors with price guidance for a spread of between 3.25% and 3.75%.

We understand that last year’s 2025-1 notes are likely to be reset at a higher level to sit directly above the new 2026-1 issuance, suggesting The Hanover is beginning to fill more of its tower with a chunk of cat bond backed reinsurance protection.

In fact, were this new Series 2026-1 offering to upsize to fill the full $150 million layer, it could mean The Hanover has $450 million of cat bond reinsurance attaching at over $1.1 billion of losses on a per-occurrence basis.

You can read all about this Commonwealth Re Ltd. (Series 2026-1) catastrophe bond from The Hanover and every cat bond transaction ever issued in the extensive Artemis Deal Directory.