Aozora Re Ltd. (Series 2017-1)

According to analysts, loss development from last year’s Japanese typhoon Hagibis is not following the same path as 2018’s Jebi, with the current prognosis being that development is much better than feared.

Three tranches of catastrophe bonds exposed to Japanese typhoon wind damage have traded up around 10% in recent weeks, as the market’s view of how large the eventual industry losses from typhoon Jebi and Hagibis will be has moderated somewhat.

In a further demonstration of catastrophe bond and insurance-linked investor demand, both the $375 million Sanders Re Ltd. (Series 2017-1) from Allstate and the $480 million Aozora Re Ltd. (Series 2017-1) cat bond from Sompo have priced at levels below their initial guidance.

The Aozora Re Ltd. (Series 2017-1) catastrophe bond issuance, sponsored by Sompo Japan Nipponkoa (SJNK), has increased in size again with the target raised to $480 million and at the same time the pricing lowered to the bottom of already reduced guidance.

Sompo Japan Nipponkoa’s (SJNK) latest catastrophe bond issuance, the Japan typhoon exposed Aozora Re Ltd. (Series 2017-1), has increased in size while marketing by 48%, to now offer ILS investors a $400 million tranche of cat bond notes we’re told.

Japanese primary insurance giant Sompo Japan Nipponkoa Insurance is returning to the capital markets to sponsor a $270 million Aozora Re Ltd. (Series 2017-1) catastrophe bond, to secure additional collateralized reinsurance protection for Japanese typhoon risks.