Kin Insurance, a direct-to-consumer home insurance company, closed a $100 million private placement catastrophe bond transaction, bringing Hestia Re Ltd.’s total outstanding limit to $275 million.
Kin Interinsurance Network has secured a new reinsurance agreement with Hestia Re., a newly established special purpose insurer in Bermuda, that will cover indemnity-based losses resulting from significant hurricanes and named storms impacting Florida over multiple years, the company said.
In April 2022, Kin Insurance closed its first private placement cat bond transaction securing $175 million. Although the transaction was announced with an initial target of $100 million, the cat bond was upsized based on the support received from investors.
Howden Tiger Markets & Advisory and Swiss Re Capital Markets acted as joint structuring agents and joint bookrunners on the second cat bond transaction.
The transaction has met its goal of obtaining a notional limit of $100 million, and due to high demand from investors, the deal was able to tighten by 175 basis points compared to the initial price guidance at the lower end, Kin said.
Jerry Fadden, Kin’s CFO said, “Hestia Re remains a strategically important capital management tool; we look forward to continuing our dialogue with investors and seeing how the capital markets evolve with our risk transfer objectives.”
“Swiss Re Capital Markets is pleased to partner with Kin to facilitate another successful transaction,” said Andras Bohm, head of ILS structuring for the Americas at Swiss Re Capital Markets.
“Investors appreciated Kin’s return to the ILS market, and we are proud to be a part of Kin’s strategy to grow its access to alternative capital through Hestia Re.”
The recent announcement of Kin’s new reinsurance agreement with Hestia Re. follows the company’s successful increase of its Series D funding round by $15 million, bringing the total amount raised to $109 million. This additional financing indicates that investors have high levels of confidence in Kin’s insurance model, which is heavily influenced by technology, as well as its future plans for expansion and growth.
Reader should refer to the Artemis Deal Directory for full details of Kin’s Hestia Re cat bond, as well as for every other cat bond and related ILS transaction since the market’s inception.
