American Coastal Insurance coverage Firm is again within the disaster bond market and in search of $100 million or extra in Florida named storm reinsurance safety from the issuance of a brand new Armor Re II Ltd. (Series 2024-2) transaction, Artemis has discovered.
This would be the second Armor Re II disaster bond from the insurer of 2024, having sponsored a $200 million Armor Re II Ltd. (Series 2024-1) cat bond issuance again in April.
American Coastal Insurance coverage Firm (AmCoastal Insurance coverage) isn’t any stranger to the cat bond market, with this new issuance set to be the seventh to take the Armor Re identify, though a quantity the place sponsored by United and Interboro entities, in addition to AmCoastal Insurance coverage.
See details of every catastrophe bond transaction in the Artemis Deal Directory.
For this issuance, AmCoastal is once more utilizing its Bermuda-based particular function insurer Armor Re II Ltd. and the automobile will search to concern a single tranche of Collection 2024-2 Class A notes, that will likely be bought to buyers and the proceeds used to collateralize a reinsurance settlement between the SPI and American Coastal Insurance coverage Firm.
These Armor Re II 2024-2 Class A notes will present American Coastal with a simply over three-year supply of Florida named storm reinsurance safety, operating to the top of December 2027, we’re instructed
The notes have been structured to guard AmCoastal with Florida named storm and hurricane reinsurance on an indemnity set off and per-occurrence foundation over that danger interval.
Armor Re II is seeking to concern $100 million or extra in Class A notes, with their protection set to connect at $50 million of losses to AmCoastal Insurance coverage and exhaust their reinsurance protection at $250 million, which suggests there’s ample room for this new cat bond to upsize for the insurer, ought to the cat bond investor group be receptive to it.
The $100 million of Collection 2024-2 Class A notes that Armor Re II Ltd. will concern include an preliminary attachment chance of 0.75%, an preliminary anticipated lack of 0.59% and are being supplied to cat bond buyers with unfold worth steerage in a variety from 9% to 10%, sources mentioned.
Whereas the attachment level seems low at $50 million, the Collection 2024-2 notes sit above said reinsurance and the FHCF participation, which signifies that the efficient attachment level seems extra like a ground-up lack of virtually $1.13 billion to AmCoastal.
Consequently, these are comparatively distant when it comes to danger and the place they sit within the AmCoastal Insurance coverage reinsurance tower, we’re instructed.
It’s an uncommon time of yr to carry a Florida hurricane cat bond to market, however given the robust investor urge for food that has been tightening spreads throughout latest new points this might play in AmCoastal’s favour.
So it will likely be fascinating to see what the reception is wish to this unseasonal Florida wind cat bond issuance, as if execution is powerful it may ship a sign to different firms in search of Florida centered reinsurance that the disaster bond market is open and capable of take up that danger at enticing pricing right now.
We additionally recently reported that American Coastal’s reported loss estimate for latest hurricane Milton was not adequate to hassle its in-force cat bond.
You’ll be able to learn all about this new Armor Re II Ltd. (Series 2024-2) disaster bond transaction and each different cat bond ever issued in our Artemis Deal Directory.
