Ursa Re II Ltd

The California Earthquake Authority (CEA) is back in the catastrophe bond market looking for more earthquake reinsurance protection from the capital markets, with an initial $250 million target for what will be its 22nd directly sponsored cat bond, an Ursa Re II Ltd. (Series 2025-1) issuance.

The Governing Board of the California Earthquake Authority (CEA) approved a revision to its guidelines for engaging in catastrophe bond risk transfer to the capital markets this week, while also noting a successful reinsurance renewal at April 1st, saying it secured favourable pricing and limit.

As the California Earthquake Authority (CEA) risk transfer needs have been adjusting and its reinsurance tower shrinking, catastrophe bonds now make up almost 32% of the total as of February 28th 2025.

The California Earthquake Authority (CEA) shrank its risk transfer tower through the January renewals, as its traditional reinsurance placements saw further contracts expire, resulting in its catastrophe bonds making up a larger share of the overall at now more than 31%.

The California Earthquake Authority (CEA) is discussing the need for either a pre-funded subsequent or second-event funding tower (with risk transfer and reinsurance perhaps a part of it), or the infrastructure for one, that would support its functions after a significant earthquake loss that depletes its claims paying ability.

The California Earthquake Authority (CEA) did not come back to the reinsurance market at its typical October 1st renewal, allowing roughly $511 million of cover to expire and it now expects to re-evaluate its risk transfer need at the January renewals, meaning a $215 million catastrophe bond will likely mature without renewal later this month.

The California Earthquake Authority (CEA) elected to not renew some $648.5 million of traditional reinsurance that expired at July 31st 2024, resulting in its reinsurance and risk transfer program shrinking by 7% to $8.5 billion.

The California Earthquake Authority (CEA) kept its reinsurance and risk transfer program relatively stable at renewals during June 2024, ending the month with a slight increase to just over $9.15 billion of limit.

The California Earthquake Authority (CEA) has maintained its reinsurance and catastrophe bond tower at $9.1 billion in size through the start of 2024, with its most recent renewals for April 1st seeing the insurer securing almost $1.2 billion in protection.

The California Earthquake Authority (CEA) entered the January reinsurance renewals with almost one billion dollars more in risk transfer than a year earlier, as the group reached December 31st 2023 with $9.1 billion of protection in-force.