February 26, 2024

SageSure, the independently managing general underwriter of specialist property catastrophe risk insurance, welcomed its use of Property Claims Services (PCS) county-level catastrophe loss reporting in triggering its latest $50 million Gateway Re Ltd. (Series 2023-3) catastrophe bond.

sagesure-logo-newThe firm said the tool’s ability to manage basis risk has been significantly enhanced through the use of PCS county-level catastrophe loss reporting in cat bond industry loss triggers.

At the same time, the county-level trigger structure also helps SageSure and its captive reinsurer Anchor Re (a direct beneficiary of cat bond retrocession) better manage its capital needs.

SageSure further explained that another benefit of the PCS county-level industry loss trigger is greater transparency for cat bond investors.

As we’ve reported since late June, SageSure is back in the cat bond market with the fifth bond in its Gateway Re cat bond series.

MGU has benefited from three offerings by Gateway Re Ltd. to protect its reciprocal exchange underwriting vehicle: $150 million Gateway Re Ltd. (Series 2022-1), $355 million Gateway Re Ltd. (Series 2023-1), $100 million Gateway Re Ltd. (Series 2023-2) and 1 issuance for two other SageSure affiliate operators $2.5 billion Gateway Re II Ltd. (2023-1 series).

In this latest Gateway Re 2023-3 cat bond, MGU has taken a different approach, securing a source of capital market support and county-weighted aggregate retrocession protection through its captive reinsurance vehicle, Anchor Re.

The latest Gateway Re Cat bond was finally priced about 7% below the midpoint of the initial spread guidance range.

The multi-year retrocession protection ultimately covered losses for SageSure’s carrier partners, SURE and SafePort, over a one-year period from a series of qualifying named storms above pre-defined industry loss triggers calculated on a county-level basis using PCS reporting data.

SageSure noted that the new cat bond is “unique in the insurance-linked securities (ILS) market” because its trigger includes a Property Claims Service (PCS) county catastrophe loss report.

“We are delighted to see strong investor support for Anchor Re’s first cat bond,” explained Anchor Re Director Travis Lewis. “Anchor Re was formed to maximize capital and capacity efficiencies, and this innovative catastrophe bond further enhances the support it provides to SURE and SafePort’s reinsurance programs.”

“Since 2022, SageSure has advocated for the important role of capital markets in our carrier partners’ reinsurance placements,” added Terrence McLean. “We are grateful to ILS investors for their support of our partners’ reinsurance programs, which allow SageSure to continue to innovate in a challenging property insurance market.”

Swiss Re Capital Markets acted as sole structuring agent and bookrunner for the latest Gateway Re catastrophe bond.

“Swiss Re Capital Markets is proud to structure and arrange SageSure’s innovative second and follow-on event coverage for its captive reinsurers,” commented Jean-Louis Monnier, Head of ILS, Swiss Re.

“The fourth offering under the Gateway Re scheme has been designed with structural features that are favorable to ILS investors, while providing Anchor Re with valuable lateral coverage.

“The franchise’s continued success reaffirms SageSure’s status as a prestigious ILS sponsor and investors’ confidence in the SageSure and Gateway Re programs.”

You can read all about the new Gateway Re Ltd. (Series 2023-2) cat bond and all other cat bond deals in the Artemis deals directory.

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