Slide returns for second $100m named storm cat bond, Purple Re 2023-2

Slide Insurance Company has returned to the catastrophe bond market for its second time, seeking another $100 million in named storm reinsurance protection through a Purple Re Ltd. (Series 2023-2) transaction.

Slide is a full-stack homeowners property insurtech and was founded by former Heritage CEO Bruce Lucas.

The insurer entered the catastrophe bond market for the first time in April 2023, securing $100 million in named storm reinsurance from a Purple Re 2023-1 cat bond issuance, its debut sponsorship.

Now, Slide is back and one driver is likely its growing portfolio of homeowners property risk in hurricane exposed states.

As we reported earlier this week, Slide is one of the insurers scheduled to takeout property policies from Florida Citizens this summer, which will grow its Florida exposure.

This second Purple Re cat bond is largely exposed to Florida risk, so will provide reinsurance that can support that growth in Slide’s home state.

It’s a very similar transaction to Slide’s first Purple Re cat bond, covering the same risks but slightly higher in the tower, with the 2023-1 cat bond set to insure to this new one.

Purple Re Ltd. will issue a single tranche of Series 2023-2 Class A notes, with a preliminary size of $100 million, we’re told.

The notes will be exposed to named storm losses in Florida and South Caroline, but as we said the majority of the expected loss is said to be in Florida, where Slide’s portfolio is largest and also set to grow with the Citizens takeout.

The reinsurance protection from this Purple Re 2023-2 cat bond will be provided on an indemnity trigger and per-occurrence basis and run across a just under three-year term, with maturity slated for June 5th 2026, we understand.

The attachment point is said to be at $315 million and exhaustion at $415 million, meaning there isn’t room for this cat bond to grow in size.

However, with the notes having both the FHCF and state-backed reinsurance, as well as the Series 2023-1 notes, inuring to them, the effective attachment point will be higher on a ground-up basis at just over $850 million, with these notes set to sit at the top of the reinsurance tower for Slide.

The initial attachment probability for the $100 million of Purple Re Series 2023-2 Class A notes will be 1.12%, while the initial base expected loss will be 1.05%.

The notes are being offered with spread price guidance in a range from 10.5% to 11.5%, sources said.

Given these 2023-2 notes will sit above the 2023-1 notes in the reinsurance tower and the 2023-1 notes priced with a spread of 12.25%, it seems likely these new Purple Re notes will price within guidance as well.

It’s encouraging to see another new and expansive insurer looking to make catastrophe bonds a larger component of its reinsurance as it grows its portfolio.

You can read all about this new Purple Re Ltd. (Series 2023-2) catastrophe bond and over 900 other cat bond transactions in our extensive Artemis Deal Directory.