Achmea Re’s Bom cites efficiency of, investor reception to new Windmill Re cat bond
Having recently secured €100 million of reinsurance protection from its new Windmill III Re DAC (2024-1) catastrophe bond, reinsurer Achmea Re’s MD Ewoud Bom has pointed to the efficiency of the multi-issuance structure, as well as the strong investor reception it felt for what is its second 144A and fourth cat bond deal.
As we’ve been reporting since the deal first launched to investors in May, this new Windmill III catastrophe bond is the fourth in the Windmill series of cat bond deals for sponsor Achmea.
Achmea returned to the cat bond market late in May, with an initial target to secure €75 million or more in collateralized European windstorm reinsurance protection from this new Windmill III Re cat bond issuance.
In the end, Achmea was able to secure this latest capital markets backed reinsurance at very attractive terms, as it upsized the issuance to provide €100 million of reinsurance protection, while the notes priced at roughly 14% below the mid-point of initial guidance.
The new cat bond covers losses on a per-occurrence basis from European windstorms on an ultimate net loss basis, originating from Achmea’s non-life insurance companies, Achmea Schadeverzekeringen N.V. and N.V. Hagelunie.
The company explained, “This transaction forms part of the overall catastrophe reinsurance purchase by Achmea Reinsurance and diversifies Achmea’s sources of protection against catastrophes and provides a multi-year period of protection running from 1 July 2024 to 30 June 2028. The transaction was upsized from an initial announcement size of € 75 million, and the notes were priced at a spread of 5.25% which is below the initial spread guidance.”
Ewoud Bom, managing director of Achmea Reinsurance further explained, “This Windmill III Re series 2024-1 issuance contributes very well to our goal to diversify our access to reinsurance capacity worldwide and to broaden and strengthen our relationships with capital market investors.
“Our choice to have Windmill III Re setup as a multi-arrangement special purpose vehicle also creates the opportunity to achieve that goal more efficiently.
“The good reception of our fourth issuance from investors confirms the mutual benefit of our strategy to transfer part of our risk to the capital market.”
Being a European peril cat bond this issuance did see strong demand from investors, as they increasingly look for diversification opportunities in a market still heavily dominated by US wind.
You can read all about this Windmill III Re DAC (2024-1) transaction and every catastrophe bond deal in our extensive Artemis Deal Directory.
