$131.25m of Hannover Re’s private cat bonds extended again, $7.5m matured

Some $131.25 million of Hannover Re’s Seaside Re private catastrophe bonds have had their maturity dates extended further into 2024, as uncertainty continues over many of the 2021, 2022 and 2023 vintage deals.

One $7.5 million transaction from 2020 has been allowed to mature in recent days, Artemis understands.

In the last couple of years, we have seen repeated extensions of maturity for some of the Seaside Re private catastrophe bond transactions, that were issued by German reinsurance firm Hannover Re’s segregated accounts vehicle, Kaith Re Ltd.

Almost $159 million of Seaside Re private cat bonds saw their maturity extended back in December 2022, after which $39 million of the extended 2022 vintage Seaside Re catastrophe bonds were later allowed to mature, presumably as it was deemed they were not going to face any losses from the catastrophe events that they were exposed to.

Which left $119.75 million of Seaside Re private cat bonds, across 2020, 2021, and 2022 vintages, still extended and still exposed to possible losses, with just one of the 2022 series allowed to mature.

After that, $109.75 million of those Seaside Re cat bonds had their maturity dates extended further through to October 15th 2023.

Then one more deal was allowed to mature and $101.25 million of those remaining Seaside Re cat bonds had their maturity dates extended by a further three months, to January 15th 2024.

More recently, at the start of this year, all of the Seaside Re private cat bonds issued in 2023 also had their maturity dates extended, taking the total to just under $139 million of Seaside Re notes extended at that time.

Now, we’ve seen one more maturity, as a $7.5 million Seaside Re (Series 2020-41) private cat bond arrangement has now been allowed to mature.

Which reduces the total still extended to $131.25 million and all of the private Seaside Re cat bond series listed below have now had their maturity dates set to July 15th 2024, Artemis has learned.

This further extension of maturity across these series of private cat bond notes will ensure that their coverage remains available for any further development of catastrophe loss events they might be exposed to.

As greater clarity emerges over the quantum of relevant loss events, their capital can either be returned to investors, or any realised losses be paid (should these series face them).

For the 2023 vintage Seaside Re cat bond notes, as we know they all cover US risks we assume the threat could be aggregated severe weather losses, given there weren’t any major named storm losses or quakes in that calendar year.

For the Series 2022 private cat bond tranches from Hannover Re’s Seaside Re program, we assume that they are at-risk of potential losses related to hurricane Ian, given that was the largest catastrophe loss event of the last year and it continues to develop at this time.

For the remaining 2020 and 2021 vintage Seaside Re private cat bonds, they are assumed to be exposed to catastrophe losses from their respective years of issuance, given almost every Seaside Re cat bond has provided its reinsurance or retro coverage across a single year risk period at most.

Hannover Re is one of the most important facilitators in the catastrophe bond market, helping investors access reinsurance related returns in securitized form, and ceding clients to access the capital markets.

The reinsurer acts as a risk transformer and facilitator for 144A cat bonds, private catastrophe bonds and other insurance-linked securities (ILS).

In 2023, Hannover Re’s Kaith Re vehicle issued four Seaside Re private cat bonds, for $49 million of risk capital. Kaith Re also issued one $15 million LI Re (Series 2023-1) cat bond, which is exposed to US earthquakes.

In 2024 so far, Hannover Re’s Kaith Re vehicle has issued five series of Seaside Re private cat bonds totalling $59 million and the recent and first ever parametric cloud outage cyber cat bond, the $13.75 million Cumulus Re deal.

According to Artemis’ extensive data on the catastrophe bond market, private cat bond issuance reached $642 million for full-year 2023 and so far in 2024 has reached almost $173 million.

Details of every private catastrophe bond we’ve tracked can be found in our Deal Directory, which you can filter by type of transaction making it easier to view only private cat bond issuances.

View our chart that breaks down issuance of catastrophe bonds by year and type, so you can analyse private cat bond issuance by year.