Catahoula Re Pte. Ltd. (Series 2020-1)

Louisiana Citizens Property Insurance Corporation, the non-profit residential and commercial property insurer for those who cannot access private market insurance in the state, has had a steep 63% residential property insurance rate increase approved by the regulator.

Additional loss creep from 2021’s hurricane Ida has now eroded another layer of Louisiana Citizens’ catastrophe bond backed reinsurance protection, with the $50 million Class B notes of the residual market insurers’ Pelican IV Re Ltd. (Series 2021-1) cat bond set to pay out all of their principal in a reinsurance recovery.

Louisiana Citizens Property Insurance Corporation has reported an estimated loss from hurricane Ida of around $461 million, but thanks to its low retention on its reinsurance tower and its catastrophe bonds, the residual market insurer will only retain $35 million.

Two outstanding per-occurrence catastrophe bond tranches sponsored by Louisiana Citizens Property Insurance Corporation have been marked down much further on some broker pricing sheets in the last week, with secondary market bid pricing now implying a market expectation of a significant loss of principal.

The latest catastrophe bond to be sponsored by non-profit state mandated insurer of last resort Louisiana Citizens Property Insurance Corporation has been successfully upsized 20%, with the Catahoula Re Pte. Ltd. (Series 2020-1) now a $60 million transaction.

Louisiana Citizens Property Insurance Corporation, the non-profit state mandated insurer of last resort, is back in the catastrophe bond market for its first transaction located in Singapore, with a currently $50 million Catahoula Re Pte. Ltd. (Series 2020-1) deal.