December 6, 2023

We understand that major US insurer Hannover Insurance Group Ltd. has raised its target for its new Commonwealth Re Ltd. (2023-1 series) catastrophe bonds to $150m, while price guidance has been narrowed.

Hannover Insurance Group logoHanover recently returned to the catastrophe bond market for the second time, looking to expand the multi-year capital market financing it has benefited from in catastrophe reinsurance arrangements.

Originally, the insurer wanted $125 million or more in reinsurance of named storms in the northeastern U.S. through the Commonwealth Re 2023-1 catastrophe bond deal.

But we’re told the target has been raised, with $150 million in notes now expected to be issued.

This means the deal now seeks to provide Hanover with $150 million of per-occurrence storm reinsurance protection in the Northeast US, on a multi-year and fully collateralized basis, using an indemnity trigger, running over three years to July 8, 2026 maturity.

The current offering of $150 million of Class A catastrophe bonds has an initial base expected loss of 0.57%, and for the first time investors are being guided to a spread of 4% to 4.5%.

That price guidance range has now narrowed to 4% to 4.25%, we’re told.

You can read all there is to know about the Commonwealth Re Ltd. (2023-1 Series) cat bond in Hannover, plus every cat bond deal on Broad Issue Artemis trade directory.

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