Spinnaker Insurance Company, a wholly owned subsidiary of Hippo Holdings Inc., has announced the successful sponsorship of Mountain Re Ltd. Series 2023-1 catastrophe bond.
As part of the transaction, Spinnaker is entering into a reinsurance contract with Mountain Re that offers protection against a variety of perils, including named storms, fire following an earthquake, severe thunderstorms, and winter storms.
The transaction also provides Spinnaker with a diversification of risk transfer capacity and access to capital markets.
According to Hippo, the $110 million cat bond is a 10% upsize from the initial $100 million transaction target.
Hippo President and CEO Rick McCathron, commented, “The successful sponsorship of our debut catastrophe bond demonstrates our maturation as a company.
“It is the direct result of our geographic diversification efforts and will serve as an integral part of our reinsurance program.
“Mountain Re is a multi-year, capital-markets-backed source of reinsurance that provides reinsurance coverage against catastrophic events for Hippo Insurance Service’s homeowners products underwritten by Spinnaker.”
Hippo suggests that the Class A Notes issued by Mountain Re Ltd. came at a spread of 6.75%, with an initial base expected loss of 0.86% and an indemnity trigger over a three-year term with the Class A Notes scheduled to mature on June 5th, 2026.
The cat bond was successfully closed on May 31, 2023. GC Securities, a division of MMC Securities LLC, was the sole structuring agent and bookrunner.
Shiv Kumar, President of GC Securities, said, “Current market conditions require creative risk transfer structures like the one provided by Mountain Re.
“We’re very pleased to support Spinnaker as it delivers innovative insurance solutions and access to the reinsurance market to MGA, program administration and insurtech companies.”
You can read all about this Mountain Re Ltd. (Series 2023-1) catastrophe bond and every other cat bond transaction in the Deal Directory of our sister publication, Artemis.