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GeoVera Insurance Holdings, Ltd. is back in the catastrophe bond market to sponsor its third transaction, which looks set to be its largest yet as it seeks $275 million of earthquake reinsurance protection from a Veraison Re Ltd. (Series 2025-1) cat bond issuance, Artemis can report.
GeoVera Insurance Holdings, Ltd. is a specialty earthquake-focused residential property insurance company and a fast-growing underwriter of catastrophe-exposed risks.
The insurer had previously sponsored two Veraison Re catastrophe bonds, one in 2023 and one in 2024, that together provide it $325 million of collateralized US earthquake reinsurance protection.
So this new Veraison Re 2025-1 catastrophe bond is set to be GeoVera’s third and at an initial target size of $275 million, looks set to be its biggest cat bond in the Veraison Re series so far.
GeoVera is again using its Bermuda licensed special purpose insurer (SPI) Veraison Re Ltd. for this Series 2025-1 catastrophe bond issuance.
Veraison Re will issue two tranches of notes, that will be sold to cat bond investors and the proceeds used to collateralize reinsurance agreements between the SPI and GeoVera.
These reinsurance agreements will provide a roughly three-year source of US earthquake reinsurance protection from the capital markets, with redemption of the notes scheduled for March 8th 2028, covering GeoVera’s insurance underwriting entities, GeoVera Insurance, GeoVera Specialty Insurance Services, and Coastal Select, we are told.
The earthquake reinsurance protection from this Veraison Re 2025-1 catastrophe bond will be provided on an indemnity trigger and per-occurrence basis to GeoVera.
A $200 million tranche of Series 2025-1 Class A notes will cover a share of GeoVera’s losses from an attachment point of $700 million to exhaustion at $1 billion, sources said.
This gives the Class A notes an initial attachment probability of 1.79%, an initial expected loss of 1.43% and these notes are being offered with price guidance in a range from 4% to 4.5%.
A $75 million tranche of Class B notes would cover a share of losses from attachment at $425 million to exhaustion at $575 million, we are told, so are a riskier layer.
The Class B notes have an initial attachment probability of 2.99%, an initial expected loss of 2.57% and these notes are being offered with price guidance in a range from 6% to 6.75%, sources told us.
For comparison, last year’s $175 million Veraison Re Ltd. (Series 2024-1) cat bond featured an initial expected loss of 1% and priced to pay investors 4.75%.
From the $150 million Veraison Re Ltd. (Series 2023-1) issuance, a Class A tranche had an initial EL of 0.65% and priced at 6.5%, while a Class B tranche had an EL of 2.91% and priced at 12%.
So, pricing looks meaningfully lower based on the guidance of the new 2025-1 Veraison Re cat bond issuance, but at the same time GeoVera’s book has grown considerably, so these are far from like-for-like deals, in terms of subject business being covered.
You can read all about this Veraison Re Ltd. (Series 2025-1) in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.
English (US) ·