Zenkyoren sponsoring $100m Nakama Re 2026-1 Japan quake cat bond

Zenkyoren has returned to the catastrophe bond market to add to its capital market backed aggregate Japanese earthquake reinsurance protection, with an initial $100 million target for this new Nakama Re Pte. Ltd. (Series 2026-1) sponsorship, Artemis has learned.

Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, buys one of the largest catastrophe reinsurance towers in the world and it has been utilising the capital markets for protection via sponsorship of series of catastrophe bonds since 2003.

This new Nakama Re 2026-1 issuance will be the sixteenth catastrophe bond directly sponsored by Zenkyoren that we have listed in our extensive Deal Directory.

For the fourth time, Zenkyoren will use its Singapore domiciled special purpose reinsurance vehicle to issue its latest catastrophe bond transaction.

Zenkyoren sponsored its first cat bond out of Singapore in 2021, then using a Bermuda SPI in 2023, but then returning to Singapore again in 2024 and 2025.

For Zenkyoren, the benefit of utilising Singapore lies in accessing the country’s insurance-linked securities (ILS) grant scheme, it appears, being an Asian sponsor of cat bonds featuring Asian catastrophe risk and so able to benefit from the grant we assume.

This is the second Singapore domiciled cat bond issuance of 2026, following close on the heels of Tokio Marine’s recently priced Kizuna Re III Pte. Ltd. (Series 2026-1) issuance.

For this latest catastrophe bond for Zenkyoren, Singapore based SPRV Nakama Re Pte. Ltd. is targeting issuance of a single tranche of Series 2026-1 Class 1 notes, through which the goal is to raise at least $100 million in capital to collateralize a reinsurance agreement between the issuing vehicle and cedent Zenkyoren.

Similar to the last few Nakama Re cat bonds for Zenkyoren, the mutual insurer is again aiming to secure fully-collateralized Japanese earthquake reinsurance protection structured on a three-year aggregate, indemnity triggered basis.

Like those recent deals, the full term of coverage is set to run across five years, to mid-April 2031, across three annual aggregate risk periods, each three-years in length, that overlap across the full term.

We assume that Zenkyoren again seeks reinsurance protection that includes coverage for losses from Japanese earthquake shake and related perils, including tsunami’s, fire, flooding and sprinkler leakage, like its recent cat bonds.

The currently $100 million tranche of Series 2026-1 Class 1 notes that Nakama Re Pte. is offering will come with an initial attachment point at JPY 1.8 trillion of losses and cover a layer to JPY 2 trillion.

The notes will sit within a roughly JPY 200 billion layer of the Zenkyoren reinsurance tower and also feature an aggregate franchise deductible of JPY 270 billion, the same as all its recent cat bond deals.

With this, the Nakama Re Series 2026-1 Class 1 cat bond notes will have an initial annualised attachment probability of 0.87%, an initial annualised expected loss of 0.82% and we’re told they are being offered to cat bond investors with price guidance for a risk interest spread in a range from 1.9% to 2.4%.

As a comparison, the Nakama Re 2024-1 cat bond notes came an initial annualised expected loss of 0.79% and priced to pay investors a spread of 2.35%, while the Nakama Re 2025-1 issuance a year ago came with an initial expected loss of 0.74% and priced to pay a spread of 2.1%.

Cat bonds remain a relatively small component of Zenkyoren’s significant catastrophe reinsurance arrangements, but it’s still encouraging to see the insurer back again in 2026 with its sixteenth cat bond sponsorship and the twelfth under the Nakama Re name.

Later this year in October, Zenkyoren has a significant $775 million of outstanding cat bond coverage from its Nakama Re Pte. Ltd. (Series 2021-1) transaction scheduled to mature.

There is opportunity to upsize this new transaction, should the sponsor choose to given the size of the layer it will fit within in the reinsurance tower.

But that upcoming maturity might also suggest Zenkyoren could return for a second cat bond later this year, timed around that September 2021 issuance’s coverage expiring.

You can read all about this Nakama Re Pte. Ltd. (Series 2026-1) catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.