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The firm’s group reinsurance officer Thorsten Fromhold said the insurer will consider using more cat bond coverage “if the market stays where it is”. -
Foundation Re is the carrier’s first entry into the cat bond market for more than a decade.
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The carrier has also lifted the effective coupon to 29.9%.
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The deal will provide annual aggregate cover on a PCS industry loss basis.
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The deal will provide coverage for named storm and earthquake events in the US, Canada and parts of the Caribbean.
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New and returning sponsors, diversifying European wind risks and early placement of US hurricane coverage all helped new issuance to smash market expectations.
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Global cat-bond capacity has grown by about 4% annually over the last six years, according to a report by the Swiss Re Institute.
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The bond will provide index-based, annual aggregate coverage in the US and Canada.
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The transaction is the second cyber cat bond in 144A format to price and follows Axis’s Long Walk Re deal in November.
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The carrier is seeking wind and quake coverage for Lloyd’s syndicates 623, 2623 and 3623, Beazley E&S Inc. and Beazley Insurance.
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The pricing on the deal has settled below initial guidance at 7.5%.
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The 144A cyber cat bond deal has increased in size from an initial target of $75mn.
