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$100 million cat bond issuance covers U.S. named storm, earthquake until June 1, 2017


July 11, 2016   by Canadian Underwriter


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Laetere Re Ltd. has issued US$100 million worth of catastrophe bonds, covering certain named storms and earthquake in the United States, on behalf of three subsidiaries of United Insurance Holdings Corp.

Rain on Window Flood Water Over Road with Cars DrivingThe issuance was announced July 7 by Swiss Re Capital Markets, which structured and placed the deal.

The bonds were issued on behalf of United Property & Casualty Insurance Company, a subsidiary of St. Petersburg, Fla.-based United Insurance, as well as on behalf of two carriers recently acquired by United. One is Hawaii-domiciled Family Security Insurance Company and the other is New York area insurer Interboro Insurance Company. United announced April 209 that it completed its acquisition of Interboro. United’s acquisition of Family Security was completed Feb. 3, 2015.

All three bonds ($30 million in Class A notes, $40 million in Class B notes and $30 million in Class C notes) have a cascading per occurrence indemnity trigger, Swiss Re stated.

This means that “as any loss events erode the reinsurance tower covering the three ceding insurers, the three tranches of Series 2016-1 cat bond notes come into play,” according to a post on the Artemis.bm blog site.

All three bonds have a one-year risk period starting June 1, 2016, Swiss Re said July 7, adding that they cover “named storms and earthquakes affecting certain coastal states” of the United States.

“The U.S. named storm coverage is for the usual suspect states of Florida, the Gulf and East coasts,” Artemis.bm stated. “The U.S. earthquake cover is for a more limited group of states, Massachusetts, Rhode Island, North & South Carolina and New Jersey,” Artemis.bm added, quoting unnamed sources.