Cat bonds that priced last week did so with lower multiples than previous comparative deals, as $150mn of new limit entered the market.
Beazley is seeking $150mn for its Fuchsia 2 2024-1 cat bond that will provide named storm and quake coverage on an indemnity, per-occurrence basis.
Covered areas include all 50 US States and the District of Columbia, all provinces and territories in Canada and parts of the Caribbean.
On deals that priced, RenaissanceRe secured $350mn for its Mona Lisa Re bond that will provide named storm coverage in all 50 US states, the District of Columbia, Puerto Rico and the US Virgin Islands.
It will also provide quake coverage in the same regions and Canada, with coverage for both perils provided on a PCS industry index, annual aggregate basis.
The multiple on the Class A note was lower than a comparative deal issued earlier this year, paying a smaller spread at a significantly higher expected loss.
The latest deal, Mona Lisa Re 2025-1 A, priced at 800 basis points (bps), paying a multiple of 1.9x on the sensitivity case expected loss of 4.14%.
In comparison, Mona Lisa Re 2024-1 A, which priced in Q2 this year, settled at 975bps, paying a multiple of 3.9x on the sensitivity case expected loss of 2.5%.
Similarly, cat bonds yet to price have achieved increased sizes and a 4-11% reduction in the midpoint spread during the marketing process, according to information sourced by Insurance Insider ILS.
This suggests excess capital in the market.
Allstate’s Sanders Re notes and American Family Mutual Insurance’s Four Lakes Re notes are on course to pay investors a lower multiple than previous deals.
Sanders Re II 2024-3 A is offering a midpoint spread of 413bps, paying a midpoint multiple of 4.30x on the sensitivity case expected loss of 0.94%.
In comparison, Sanders Re III 2024-1 A paid 575bps, with a significantly higher multiple at 5.98x, and a slightly higher expected loss of 0.96%.
American Family, meanwhile, is offering a 575bps spread on the Class A layer of its latest deal – in line with the spread on the 2023 version, but for double the expected loss – at 1.74% versus 0.68%.
Similarly, the spread on the class B layer has dropped by 100 bps from the 2023 equivalent, despite a 40bps uplift in expected loss.