SageSure completes new cat bond

SageSure completes new cat bond | Insurance Business Canada

Reinsurance

SageSure completes new cat bond

It is the second issuance for the firm in the span of a month

Reinsurance

By
Kenneth Araullo

SageSure, together with SureChoice Underwriters Reciprocal Exchange (SURE), a policyholder-owned entity, has announced the successful closure of the Gateway Re 2024-2 catastrophe bond.

The bond, valued at $130 million, closed with pricing 75 basis points tighter than the initial midpoint price guidance. Initially targeting a range between $100 million and $130 million, the bond ultimately achieved the higher end of its goal.

The bond is the latest in a series issued by Gateway Re, now totaling $1.16 billion in risk capital, underscoring the growing reliance on insurance-linked securities (ILS) to underwrite catastrophe risk.

Less than a month ago, SageSure also finalized the issuance of the Gateway Re 2024-1 catastrophe bond, which achieved a closure at $250 million, 67% above the midpoint of its initially targeted range of $100 million to $200 million.

For this issuance, the 2024-2 notes specifically provide second and subsequent event loss protection for both SURE and SageSure’s other affiliated exchange, Elevate, until the conclusion of the 2024 Atlantic hurricane season.

Ed Konar, president of SURE, expressed gratitude for the robust capital market support for the new cat bond.

“This issuance provides an additional layer of named-storm protection during this year’s hurricane season, enabling SURE to protect more property owners in catastrophe-exposed regions,” he said.

Terrence McLean, president and CEO of SageSure, also remarked on the ongoing investor trust and expressed the company’s gratitude to the ILS community.

“SageSure is grateful for the ILS community’s confidence in SURE and the Gateway Re franchise,” McLean said. “Catastrophe bonds have been an integral part of our underwriting partners’ reinsurance programs since 2022. The continued support from ILS investors enables growth in markets that need our solutions most.”

Swiss Re Capital Markets played a key role as the sole structuring agent and bookrunner for the bond issuance. Jean-Louis Monnier, CEO of Swiss Re Capital Markets Corporation, highlighted the unique aspects of the bond which led to the company’s support.

“Swiss Re is excited to once again partner with SURE and SageSure on this successful second-event catastrophe bond, a risk profile rarely seen in the ILS market,” Monnier said. “Structured as an efficient zero-coupon note, the Gateway Re issuance achieved competitive pricing and a remarkably strong execution. This transaction is a testament to the continued investor support for SURE, SageSure, and the Gateway Re franchise. It also demonstrates SURE and SageSure’s agility in securing different forms of alternative capital capacity.”

What are your thoughts on this story? Please feel free to share your comments below.