Groupama seeks €150m windstorm cover from Quercus Re catastrophe bond

Groupama, the French mutual insurance and reinsurance company, is back in the 144A catastrophe bond market for the first time since 2013, seeking €150 million in windstorm reinsurance protection from the capital markets through a Quercus Re DAC 2024-1 catastrophe bond issuance, Artemis has learned.

Groupama Assurances Mutuelles was most recently featured in our cat bond Deal Directory when it was the beneficiary of a private cat bond in 2023.

Prior to that, Groupama had sponsored Green Valley cat bonds in 2007 and 2010, then Green Field cat bonds in 2010 and 2013.

Details of every Groupama catastrophe bond can be found here.

For this new catastrophe bond, Groupama has established Quercus Re DAC, which has been registered in Ireland as a Designated Activity Company for the purpose of issuing series of catastrophe bond notes.

Quercus Re DAC will issue a single tranche of notes, which are designed to provide Groupama a multi-year source of fully collateralized reinsurance, backed by capital markets investors.

Quercus Re is offering €150 million of notes to investors, to provide the collateral to back a source of windstorm reinsurance protection across France for Groupama.

The coverage will run across a roughly three year term to July 8th 2027, we are told.

The reinsurance protection will be annual aggregate in nature and based on an indemnity trigger, with deductibles and loss caps in place that also define the attachment and exhaustion, it seems.

The per-event deductible for the mutual business is €65m and €22m for the GAN business, while per-event loss caps are €200m for the mutual business and €48 million for the GAN business, while the aggregate deductible (which is effectively the attachment point) is €230m for the mutual business and €60 million for the GAN Assurances business, we are told.

The €150 million of notes Quercus Re DAC is offering come with an initial attachment probability of 3.57%, an initial expected loss of 2.30% and are being offered to investors with price guidance in a range from 8% to 8.75%, sources said.

This being a European peril focused catastrophe bond could generate significant investor demand, given the diversification it can offer to their portfolios and the fact it comes to market during the US wind season and right after a busy period of US wind cat bond issuance.

You can read all about this new Quercus Re DAC 2024-1  catastrophe bond and every other cat bond deal in the Artemis Deal Directory.