Hippo says Mountain Re cat bond “economically efficient” reinsurance for Spinnaker

Home insurtech Hippo has hailed the completion of its subsidiary Spinnaker Insurance Company’s debut Mountain Re Ltd. (Series 2023-1) catastrophe bond, saying the cat bond provides “economically efficient” reinsurance, as well as access to the capital markets.

The Mountain Re cat bond issuance closed to provide sponsor Spinnaker, a personal and commercial lines program and fronting specialist owned by Hippo, a slightly upsized $110 million of collateralized catastrophe reinsurance, as we’ve been reporting.

That was a 10% upsize from the initial $100 million transaction target, but the notes were eventually priced at the top-end of guidance.

So it was encouraging to see the deal upsize, as Hippo and Spinnaker demonstrated an appetite to diversify their reinsurance capital sources using the Mountain Re catastrophe bond.

Spinnaker gets three years of reinsurance from cat bond funds and their investors via special purpose insurer Mountain Re covering losses from a range of perils, including named storms, fire following an earthquake, severe thunderstorms, and winter storms.

Hippo noted the “diversification of risk transfer capacity and access to capital markets,” its subsidiary now benefits from.

“The successful sponsorship of our debut catastrophe bond demonstrates our maturation as a company. It is the direct result of our geographic diversification efforts and will serve as an integral part of our reinsurance program,” commented Hippo President and CEO Rick McCathron.

“Mountain Re is a multi-year, capital-markets-backed source of reinsurance that provides reinsurance coverage against catastrophic events for Hippo Insurance Service’s homeowners products underwritten by Spinnaker.”

“Current market conditions require creative risk transfer structures like the one provided by Mountain Re,” commented Shiv Kumar, President of GC Securities, the sole structuring agent and bookrunner for the Mountain Re cat bond.

“We’re very pleased to support Spinnaker as it delivers innovative insurance solutions and access to the reinsurance market to MGA, program administration and insurtech companies.”

You can read all about this new Mountain Re Ltd. (Series 2023-1) catastrophe bond, and view details of more than 900 other cat bond issuances, in the extensive Artemis Deal Directory.