The Hanover secures 50% upsized $150m Commonwealth Re 2026-1 catastrophe bond

The Hanover Insurance Group, Inc. has now successfully upsized and priced its fourth catastrophe bond sponsorship, securing $150 million of US-wide multi-peril reinsurance protection from the Commonwealth Re Ltd. (Series 2026-1) transaction, Artemis can report.

We first reported that The Hanover had returned to the cat bond market on May 14th.

At the time, the insurer’s initial target was to secure at least $100 million of fully-collateralized catastrophe reinsurance from its fourth visit to the catastrophe bond market.

We then reported on June 1st that The Hanover was aiming to upsize this Commonwealth Re Series 2026-1 offering by 50% to fill the full reinsurance layer it will occupy, providing $150 million of protection, while the price guidance was lowered.

Now, sources have told us that The Hanover has achieved optimal execution on both fronts, securing the 50% upsized amount of reinsurance protection priced at the lowest end of the reduced guidance range.

Previously, The Hanover secured fully-collateralized named storm reinsurance across just US northeast states with its first two cat bonds in 2022 and 2023. The insurer then returned in 2025 and secured its first multi-peril reinsurance from the cat bond market, with the $200 million Commonwealth Re 2025-1 deal.

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

With the transaction now priced, special purpose insurer Commonwealth Re Ltd. will now issue a single $150 million tranche of Series 2026-1 Class A notes.

The proceeds from the sale of the notes to investors will collateralize a source of multi-year reinsurance to protect The Hanover and subsidiary companies against certain losses from the perils of US named storm, earthquake, severe thunderstorm, winter storm and wildfire, on an indemnity trigger and per-occurrence basis across three years from July 1st through to the end of June 2029.

The now confirmed as $150 million of Series 2026-1 Class A notes that Commonwealth Re will issue come with an initial base expected loss of 1.18%.

Initially, the notes were offered to investors with price guidance for a spread of between 3.25% and 3.75%, which was later revised to an updated range of between 3% and 3.25%.

We’re now told the $150 million of notes have been priced to pay investors an initial risk interest spread of 3%, so the lowest end of guidance.

As a result, this new Series 2026-1 cat bond will fill the full $150 million layer of the insurer’s reinsurance tower they are set to occupy, meaning that once this issuance is settled The Hanover will have $450 million of cat bond backed reinsurance attaching excess of $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.