Universal targets first cat bond with $100m Cosaint Re from Singapore

Universal targets first cat bond with $100m Cosaint Re from Singapore

Universal Insurance Holdings, the Florida headquartered, nationally extensive U.S. primary insurance coverage provider, has entered the catastrophe bond market for the very first time with a $100 million Cosaint Re Pte. Ltd. (Series 2021-1) deal that is being released out of Singapore.Universal has actually always been a substantial user of the capital markets and insurance-linked securities (ILS) funds within its reinsurance tower, but this Cosaint Re disaster bond is the very first time weve noted a subsidiary of the insurer within our cat bond Deal Directory.
Cosaint implies defense in Gaelic (Irish) and its a suitable name for the very first disaster bond foray from Universal.
Sources described to us that Universal is sponsoring its very first catastrophe bond to protect multi-year, collateralized reinsurance protection versus losses from U.S. named storms, so typhoons and tropical storms, for its Universal Property and Casualty Insurance Company (UPCIC) and any direct subsidiaries.
Hence, Universal Property and Casualty Insurance Company (UPCIC) is the cedent for the coverage and we comprehend any existing or future subsidiaries can likewise benefit from the reinsurance coverage provided by the Cosaint Re Pte. catastrophe bond deal.
Universal has actually picked to release its very first feline bond out of Singapore, with special purpose reinsurance car Cosaint Re Pte. Ltd. established there.
Cosaint Re Pte. Ltd. will seek to provide a single tranche of Class A notes, the profits of which sale will be used to collateralize a hidden reinsurance agreement between Cosaint Re and UPCIC.
The reinsurance protection will cover UPCIC versus losses from named storms, so hurricanes and typhoons, across all U.S. states where the business has exposure, that includes northeast and east coast states, Gulf Coast states where UPCIC runs and also Hawaii.
Were informed that the large majority of the direct exposure held within this Cosaint Re catastrophe bond will be in the state of Florida, Universals house.
The protection provided by the disaster bond will be on an indemnity reinsurance and per-occurrence basis, across a three-year term.
Cosaint Re Pte. is looking for to provide at least a $100 million Class A tranche of Class A keeps in mind, with the coverage attaching at simply over $1.1 billion of UPCIC named storm losses in the first risk duration, were informed.
We comprehend that this corresponds to a preliminary expected loss of 2.97% for the notes which they are being provided to catastrophe bond investors with voucher in an assistance variety from 9.5% to 10.25%.
Its encouraging to see another brand-new sponsor pertaining to the disaster bond market looking for reinsurance in 2021.
Universal purchases a substantial reinsurance program, with called storm coverage an essential focus. So needs to pricing prove appealing in the catastrophe bond market it would be simple to see the company making cat bonds a routine part of the tower, given the multi-year advantages the Cosaint Re problem might bring.
Well keep you upgraded as the Cosaint Re Pte. Ltd. (Series 2021-1) catastrophe bond concerns market and you can read about this and every other feline bond deal in the Artemis Deal Directory.

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