Kin sees $175m Hestia Re cat bond as “integral” to reinsurance program

Kin Insurance’s debut $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond issuance is expected to be an “integral” component of the fast-growing insurtech’s reinsurance tower, according to its Chief Insurance Officer.

Commenting on the completion of the companies first catastrophe bond, which Artemis first reported on a month ago, Kin is evidently delighted with the response of capital market investors and their support for its reinsurance needs.

As a reminder, the Hestia Re Ltd. (Series 2022-1) catastrophe bond began life as a $100 million issuance, with which Kin was aiming to secure multi-year indemnity reinsurance protection against losses to the personal property lines portfolio of the Kin Interinsurance Network from named storms or hurricanes that impacted its key state of Florida.

Kin’s target for the cat bond was lifted thanks to strong investor demand, with the upper-end of that target raised to $200 million.

In the end, Kin settled for the $175 million of protection from its first Hestia Re cat bond, as the pricing was fixed at the upper-end of the initial guidance range, with a coupon of 9.5% set to be paid to cat bond investors.

Commenting on the successful first cat bond sponsorship of the company, Kin’s Chief Insurance Officer Angel Conlin said, “Our first catastrophe bond will be an integral part of Kin’s broader reinsurance program which protects our company.”

Adding that, “The transaction also highlights our strong support from capital market investors, continued backing by industry-leading reinsurers, and ability to bring more capital directly into our growing business, which will be important as we explore subsequent alternative risk transfer options in the future.”

Artemis also reported last week that Kin bolstered the surplus capital of its main carrier operating in Florida by $20 million in order to meet Demotech’s requirements for its rating affirmation recently, a move that took place during the marketing of this cat bond but did not affect investor demand for the deal.

Swiss Re Capital Markets and TigerRisk Capital Markets & Advisory were both assisting on the issuance, as joint structuring agents and joint bookrunners for the first cat bond transaction from Hestia Re Ltd.

“Swiss Re Capital Markets is proud to have advised Kin in structuring and placing its first-ever catastrophe bond,” commented Andras Bohm, Head ILS Structuring for the Americas of Swiss Re Capital Markets. “The success of the transaction and upsize to $175 million are a testament to ILS investors’ willingness to provide catastrophe risk capacity in support of Kin’s fast-growing and technology-driven direct-to-consumer business model.”

Philipp Kusche, Global Head of ILS and Capital Solutions at TigerRisk Capital Markets & Advisory, also said, “We are delighted to have supported Kin in its inaugural catastrophe bond transaction, which comes on the heels of the establishment of Hestia Re. It has been exciting to work with Kin in bringing their unique underwriting approach to the capital markets, and we fully expect the enthusiasm to support this transaction to extend into the June 1 renewal of Kin’s traditional reinsurance program.”

You can read all about the Hestia Re Ltd. (Series 2022-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.