9 hours ago
4
Hiscox Group is back in the catastrophe bond market seeking $200 million in retrocessional North American peak peril reinsurance protection from the capital markets with an Ocelot Re Ltd. (Series 2025-1) issuance, Artemis can report.
Just over one year ago, Hiscox secured $125 million in peak peril aggregate retrocessional reinsurance cover from an Ocelot Re Ltd. (Series 2023-1) cat bond issuance.
That was the groups first catastrophe bond since 2002, when it had sponsored the St Agatha Re Ltd. deal, a transaction that was the first cat bond to protect a Lloyd’s of London syndicate.
Hiscox is set to use Ocelot Re Ltd., a special purpose insurer (SPI) in Bermuda, again for its latest catastrophe bond issuance.
Ocelot Re Ltd. will look to issue two tranches of of Series 2025-1 notes, that are designed to provide Hiscox with a $200 million multi-year source of US and Canada named storm and earthquake retrocession, we’ve learned from sources.
One tranche of this Ocelot Re 2025-1 catastrophe bond will be structured to provide annual aggregate and weighted PCS industry-loss trigger based coverage, while the second will provide industry-loss index trigger second and subsequent event occurrence protection, we understand.
The coverage will benefit Hiscox’s Bermuda underwriting entity and its Lloyd’s syndicates 33 and 6104, we are told, with the protection set to run across four annual risk periods, from settlement of this issue to February 2029.
We understand that there is a $10 billion per-event deductible in place for the annual aggregate tranche of notes, meaning a named storm or earthquake won’t qualify to erode the attachment under these cat bond notes until the reported industry-loss is above that level.
A $150 million tranche of Class A notes will provide the annual aggregate protection and have an initial attachment probability of 1.73%, an initial expected loss of 1.35% and are being offered to investors with price guidance for a spread of between 4.25% and 4.75%, we’re told.
A $50 million tranche of Class B notes will provide second and subsequent event occurrence based protection and have an initial attachment probability of 2.55%, an initial expected loss of 1.89% and are being offered to investors with price guidance for a spread of between 6.5% and 7.25%, sources said.
It’s encouraging to see Hiscox looking to increase and also broaden out the coverage it receives from the capital markets with this second Ocelot Re catastrophe bond.
You can read all about this Ocelot Re Ltd. (Series 2025-1) catastrophe bond from Hiscox and every other cat bond issuance in our extensive Artemis Deal Directory.
English (US) ·