Hannover Re’s 2023 Seaside Re cat bonds added to extensions, now totalling $139m

All of the 2023 issued vintage of Hannover Re’s Seaside Re private catastrophe bonds have now had their maturity dates extended, Artemis has learned, taking the total extended to almost $139 million across the 2020, 2021, 2022 and now 2023 vintage deals.

Over the last year, there have been repeated extensions of maturity for some of the Seaside Re private catastrophe bond transactions, that were issued by German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd.

Close to $159 million of Seaside Re private cat bonds had their maturity dates extended back in December 2022.

$39 million of the extended 2022 vintage Seaside Re catastrophe bonds were later allowed to mature, presumably as it was deemed they were not going to face any losses from the catastrophe events that they were exposed to.

Which left $119.75 million of Seaside Re private cat bonds, across 2020, 2021, and 2022 vintages, still extended and presumably still exposed to possible losses, with just one of the 2022 series allowed to mature.

Next, $109.75 million of the Seaside Re cat bonds had their maturity dates extended further through to October 15th 2023.

Then one more was allowed to mature and $101.25 million of those remaining Seaside Re cat bonds had their maturity dates extended by a further three months, to January 15th 2024.

Now, all of the Seaside Re private cat bonds issued in 2023 have also had their maturity dates extended, taking the total to just under $139 million of Seaside Re notes now extended.

The following transactions in the Seaside Re private catastrophe bond series have all been extended for a further three months, to April 15th 2024:

These Seaside Re private cat bond transactions that were issued in 2023 have now all had their maturity dates extended for the first time, also to April 15th 2024:

The single Seaside Re private cat bond transaction below did not have its maturity date extended, instead being allowed to mature:

As usual, we assume that the extended issuances are being retained to allow for further development of any catastrophe loss events that might have been covered by them, with greater clarity required before their capital can be returned to investors, or any realised losses be paid (should they face them).

It is interesting that the 2023 vintage has now also been extended, as we do know the Seaside Re private cat bonds all cover US risks, but with no significant peak peril events, this suggests it could be aggregated severe weather losses that has driven their extension of maturity. We can’t be certain though, these being private deals and information being limited.

For the Series 2022 private cat bond tranches from Hannover Re’s Seaside Re program, we made the assumption that they are at-risk of potential losses related to hurricane Ian, given that was the largest catastrophe loss event of the last year and continues to develop.

For the remaining 2020 and 2021 vintage Seaside Re private cat bonds, these are assumed to be exposed to catastrophe losses from their respective years of issuance, given almost every Seaside Re cat bond has provided its reinsurance or retro coverage across a single year risk period at most.

Hannover Re is one of the most important facilitators in the catastrophe bond market, helping investors access reinsurance related returns in securitized form, and ceding clients to access the capital markets.

The reinsurer acts as a risk transformer and facilitator for 144A cat bonds, private catastrophe bonds and other insurance-linked securities (ILS).

In 2023, Hannover Re’s Kaith Re vehicle issued four Seaside Re private cat bonds, for $49 million of risk capital. Kaith Re also issued one $15 million LI Re (Series 2023-1) cat bond, which is exposed to US earthquakes.

According to Artemis’ extensive data on the catastrophe bond market, private cat bond issuance reached $642 million for full-year 2023.

Details of every private catastrophe bond we’ve tracked can be found in our Deal Directory, which you can filter by type of transaction making it easier to view only private cat bond issuances.

View our chart that breaks down issuance of catastrophe bonds by year and type, so you can analyse private cat bond issuance by year.