U.S. primary mutual insurer USAA appears to have made another reinsurance recovery under one of its Residential Re catastrophe bond programs, while other ResRe tranches have had their maturity extended further again.
We explained recently that USAA had begun to benefit from some reinsurance recoveries under its cat bonds, as it began to claim on the coverage cat bonds provide to it across its property catastrophe program towers.
In our previous article on the recoveries, we highlighted that USAA appeared to have been able to claim almost $200 million back from some of the Residential Re and Espada Re range of its sponsored catastrophe bonds.
Now, it seems USAA has added another $10 million to these recoveries, as the amount outstanding on another ResRe cat bond tranche has been reduced by that amount.
The first of USAA’s cat bonds affected in this latest round, is the Residential Reinsurance 2015 Limited (Series 2015-1) aggregate cat bond transaction.
The Class 10 notes of this cat bond had already seen their net principal amount of $50 million reduced by almost half to $26,511,039. This tranche has now had the maturity of its remaining notes extended to December 6th 2019.
But the Class 11 tranche of the ResRe 2015-1 notes, which were $100 million in size but saw its net principal amount reduced by 50% to $50 million, has now been reduced by another $10 million, leaving $40 million remaining and these notes are also now extended to maturity at December 6th.
Meanwhile, USAA’s Residential Reinsurance 2014 Limited (Series 2014-1) Class 10 tranche of cat bond notes, which saw a full draw-down to zero of principal as it’s $80 million seemingly paid out recently, has also been extended through till December 6th 2019, even though the principal is now nil dollars.
Finally, the $100 million Residential Reinsurance 2018 Limited (Series 2018-1) Class 11 tranche of notes has had its maturity extended to December 6th, but its principal still remains fully intact at this time.
Adding this latest potential recovery (important to stress ‘potential’, as we don’t have the details of any reinsurance recoveries made) to the previous ones we reported, suggests that USAA may have been able to claim almost $210 million back from its catastrophe bonds to help pay for losses from 2017 and 2018 catastrophe related events.