The North Carolina Insurance Underwriting Association (NCIUA) is back in the disaster bond market, looking for $200 million or more in called storm reinsurance defense from a Cape Lookout Re Ltd. (Series 2023-1) deal.
The property insurance provider of last hope for North Carolina, the NCIUA is looking for $200 million or more in called storm reinsurance defense with its latest cat bond deal, sources informed us.
That’s a departure from its previous Cape Lookout Re cat bonds, which had all supplied the NCIUA with multi-year North Carolina called storm & serious thunderstorm reinsurance defense.
Cat bond financiers are less eager to handle attritional loss direct exposure to serious thunderstorms nowadays, suggesting it’s most likely the NCIUA can improve execution by keeping this cat bond simply concentrated on called storms (so cyclones and hurricanes).
Cape Lookout Re Ltd., the Bermuda unique function insurance provider utilized by NCIUA for its disaster bonds, is targeting issuance of a single, preliminarily sized at $200 million, tranche of Series 2023-1 Class A notes, we comprehend.
These notes will be offered to cat bond financiers, with the earnings to be utilized to collateralize a retrocessional reinsurance arrangement in between Cape Lookout Re Ltd. and fronting reinsurer Hannover Re, with the reinsurance company then participating in a reinsurance arrangement with the North Carolina Insurance Underwriting Association (NCIUA) to hand down the protection.
The $200 million or more in notes will supply the NCIUA with a capital markets backed source of indemnity and yearly aggregate reinsurance defense versus called storm losses, over a 3 year term, with certifying losses requiring to drive a $25 million or higher effect to the insurance provider of last hope to certify.
The Series 2023-1 Class A notes will sit at an accessory of $2.88 billion of losses, covering a $500 million layer to $3.38 billion, providing a preliminary accessory possibility of 1.55%, a preliminary predicted loss of 1.37% and including cost assistance in a variety from 7% to 7.75%, we’re informed.
Once released, this brand-new Cape Lookout Re 2023-1 cat bond will sit greater than other in-force cat bond protection the NCIUA has, which this will provide the insurance provider a possibility to grow its capital markets support as a share of its reinsurance tower.
You can check out everything about this brand-new Cape Lookout Re Ltd. (Series 2023-1) deal and every other cat bond ever released in our Artemis Deal Directory.
