Catastrophe bond news

Coastal property managing general underwriter SageSure has raised the target size for its new Gateway Re Ltd. (Series 2025-1) catastrophe bond issuance, with now between $470 million and as much as $555 million of first and second event US named storm reinsurance protection sought.

Direct-to-consumer insurtech company Kin Insurance is back in the catastrophe bond market to sponsor its third issuance, seeking $200 million or more in Florida named storm protection from this Hestia Re Ltd. (Series 2025-1) transaction.

US insurer Allstate expects its losses from the recent Los Angeles, California wildfires will be around $1.1 billion, pre-tax and net of reinsurance, which has implications for the erosion of aggregate Sanders Re catastrophe bond deductibles and may result in recoveries under its Nationwide excess-of-loss reinsurance tower.

Insurer USAA revealed today that it has received more than 3,500 claims related to the California wildfires, with 86% of claims receiving initial payments of more than $1 billion, with the company projecting that its members’ wildfire losses will reach roughly $1.8 billion.

Speaking during the Everest fourth-quarter earnings call yesterday, CFO Mark Kociancic explained that the reduced size of the firm’s catastrophe bond program has enabled it to retain more of the economics from its natural catastrophe underwriting.

Price adjustments to catastrophe bonds exposed to the California wildfires drove the overall yield of the catastrophe bond market higher in January 2025, to end the month back in double-digit territory, at 10.34% in USD, according to the latest data from Plenum Investments.

The mark-to-market impact to catastrophe bonds from the Los Angeles, California wildfires has risen, as a number of cat bond names saw further mark-downs on  pricing sheets last Friday, while some aggregate cat bonds saw negative movements that had not done so before.

According to Swiss Re Capital Markets, the insurance-linked securities (ILS) market continued the growth trend of recent years throughout 2024, as the last twelve months were marked by a “robust performance” for cat bond investors in the absence of events large enough to have a significant impact on the market.

Recent estimates suggest that insured losses from the Los Angeles, California wildfires could be higher than anticipated. As a result, catastrophe bond prices are showing signs of weakness, with the market’s benchmark recording its first-ever negative January return since its inception over two decades ago, according to cat bond fund manager Icosa Investments AG.

Tower Hill Insurance Exchange has increased the target size for what will be its second catastrophe bond, lifting the Winston Re Ltd. (Series 2025-1) offering by 75% to provide $175 million in Florida named storm reinsurance protection.