US Coastal insurers secure $100m Chartwell Re cat bond at reduced pricing

The two US Coastal named insurance companies administered by Cabrillo Coastal General Insurance Agency have now secured their targeted $100 million in named storm reinsurance from the Chartwell Re Ltd. (Series 2026-1) issuance, with the notes pricing at the low-ends of reduced guidance, Artemis can report.

The US Coastal insurers returned to the cat bond market earlier this month, looking to expand the role catastrophe bonds play in their reinsurance tower, with an initial target to secure $100 million of fully-collateralized reinsurance from this new Chartwell Re Series 2026-1 offering.

As we later reported, the target size of the issuance remained the same but the sponsoring insurers, US Coastal Insurance Company and US Coastal Property & Casualty Insurance Company, were aiming to secure the reinsurance protection at reduced pricing, capitalising on strong execution in the cat bond market.

Now, we’re told the insurers have priced and finalised the coverage, securing the $100 million of named storm reinsurance at attractive spreads from what will now become their second successful cat bond sponsorship.

Recall that these same insurers secured $330 million of named storm reinsurance across three tranches of notes issued under their debut catastrophe bond sponsorship, Chartwell Re 2025-1 roughly one year ago.

Which means they will go into the Atlantic hurricane season this year with $430 million of cat bond protection from the capital markets.

So the Chartwell Re Series 2026-1 cat bond notes are now confirmed to provide $100 million of catastrophe reinsurance to the two US Coastal insurers on an indemnity trigger and per-occurrence basis, across a three year term and covering named storm losses in the states of Alabama, Florida, Mississippi, New Jersey, New York, Rhode Island, and Texas.

As we’ve explained in our previous reports, New York and Florida are the states making the main contribution to the notes expected loss.

The $55 million tranche of Series 2026-1 Class D notes are the least risky of the two being issued, having an initial expected loss of 1.32%.

At first, these notes were offered to cat bond investors with price guidance in a range from 4.75% to 5.5%, which was later lowered to a range of 4.25% to 4.75%. We’re now told that at final pricing the risk interest spread was fixed at 4.25%, so the low-end of reduced guidance.

The $45 million tranche of Series 2026-1 Class E notes are riskier, having an initial expected loss of 5.67%.

These notes were initially offered to cat bond investors with price guidance in a range from 12.5% to 13.25%, which later fell to an updated range of 12.25% to 12.5%. We understand these notes were also priced at the lowest end, for a risk interest spread of 12.25%.

The Class D notes from this new cat bond are set to occupy the highest layer in the reinsurance tower for these insurers, while the Class E notes will be the lowest or riskiest, and the three tranches from the 2025 cat bond will sit between them, each on top of the other.

As a result of which, the US Coastal insurers now have cat bonds extending up a meaningful proportion of their reinsurance tower, firmly embedding the capital markets within their risk management arrangements for the coming named storm season.

You can read all about this new Chartwell Re Ltd. (Series 2026-1) catastrophe bond and almost every other cat bond deal ever issued in the Artemis Deal Directory.