The Hartford again uses catastrophe bonds to extend reinsurance tower higher

US primary property and casualty insurer The Hartford clearly sees the catastrophe bond market as a valuable source of efficient protection, that over the last few years has helped the company meaningfully raise the top of its occurrence catastrophe reinsurance tower.

Two year’s ago, after the January 2024 reinsurance renewals, The Hartford’s executives explained that sponsorship of the $200 million Foundation Re IV Ltd. (Series 2023-1) catastrophe bond in December 2023 helped to raise the top of its reinsurance tower.

For 2024, the Foundation Re IV 2023-1 catastrophe bond provided the company 66.67% coverage across a $300 million layer that attached in excess of $1.1 billion of per-occurrence losses and exhausted at $1.4 billion.

For 2025, the Foundation Re IV 2023-1 cat bond was reset slightly higher, to attach at $1.19 billion and exhaust at $1.49 billion.

Now, for the 2026 calendar year that cat bond sits at an attachment point of $1.29 billion of losses and covers a share up to exhaustion at $1.62 billion.

But, the latest catastrophe bond sponsored by The Hartford has raised the top of its occurrence catastrophe reinsurance tower even higher for 2026.

Back in December 2025, The Hartford secured $270 million of catastrophe reinsurance protection from the Foundation Re IV Ltd. (Series 2026-1) catastrophe bond issuance.

It is the company’s largest cat bond sponsorship yet and for the new calendar year it occupies a layer above the 2023-1 cat bond, attaching at $1.6 billion and covering 90% of losses from tropical cyclones or earthquakes up to $1.9 billion.

That exhaustion point is a significant increase to the top of the insurer’s reinsurance tower, which has now been elevated by half a billion dollars in just two years, thanks to the efficiency of the cat bond risk capital sitting in those upper-layers.

In addition, The Hartford has purchased more reinsurance in other formats as well, however the level where the cat bond coverage attaches has only risen from $1.1 billion to $1.29 billion, while the level the cat bonds exhaust at has risen from $1.4 billion to $1.9 billion, showing how the company has efficiently extended and stretched this coverage across the now higher upper-layers.

At the January 2026 reinsurance renewals, The Hartford secured both occurrence and aggregate protection at risk-adjusted rate decreases.

On the per-occurrence side, over a retention of $200 million, The Hartford renewed reinsurance that covers 40% of losses up to $350 million for perils other than earthquakes and named storms or hurricanes.

At the $350 million level, all perils occurrence reinsurance takes over, with 75% of $150 million excess of that level covered and then 90% of $800 million (up from the prior year’s $700m) covered from the $500 million to $1.3 billion level (up from $1.2bn).

Continuing the occurrence reinsurance protection, that’s where the cat bonds kick in with just tropical cyclone and earthquake protection, covering 60.79% of losses from $1.29 billion to $1.62 billion and 90% of losses from $1.6 billion to $1.9 billion.

On the aggregate catastrophe reinsurance side, The Hartford’s treaty remains the same year-on-year, attaching and covering 100% of qualifying losses from $750 million to $950 million.

Chief Financial Officer Beth Bombara commented on the reinsurance renewal during a recent earnings call, saying, “We continue to actively manage our catastrophe exposure through disciplined underwriting and aggregation control, supported by a robust reinsurance program with both per occurrence and aggregate protection.

“At January 1 2026, our per-occurrence catastrophe cover was renewed with favourable terms and conditions, delivering a reduction in costs on a risk-adjusted basis.

“In addition, we renewed our aggregate treaty at $200 million excess of $750 million, achieving a decrease in cost on a risk-adjusted basis.”

Bombara further highlighted the important role that catastrophe bonds play for The Hartford.

The CFO explained, “We continued our strategy of combining traditional reinsurance with our catastrophe bond platform, Foundation Re, and on January 1st issued a new catastrophe bond increasing the total per-occurrence program for peak perils to $1.9 billion.

“This strategic addition enhances our capital strength, provides multi-year stability and complements our traditional reinsurance placements, supporting growth in property underwriting.”

As a reminder, you can read all about the Foundation Re IV Ltd. (Series 2026-1) cat bond transaction from The Hartford and view details of almost every catastrophe bond ever issued in our extensive Deal Directory.