Catastrophe bonds

The $100mn Southern Fidelity notes were dropped after the insurer suspended new business.

The Hanover Insurance Group is seeking $100mn of named storm cover in the 13 north-eastern states of the US with its debut Commonwealth Re catastrophe bond, Trading Risk understands.

The trigger is territory-weighted industry loss, with the application of an inflation factor.

Higher reinsurance premiums led to the upward adjustment of spreads.

The issuance is seeking US named storm cover for Core Specialty companies.

The increases follow full recoveries on previous bonds after Ida losses.

The state-backed carrier hopes to fill out more of the gaps in the coming days.

The cover offers protection for a one-in-160-year first event.

The Floridian said it had not needed to use the new Reinsurance to Assist Policyholders scheme that was created via new legislation.

The Californian carrier now has reinsurance coverage exhausting $2.08bn for earthquake events.

Southern Fidelity had earlier messaged agents that it would cease writing new business and renewals.

The reinsurer has put the first layer through its captive, a move that reflects the lack of reinsurance capacity for this high-risk business.