Kin Insurance, a US insurtech and primary carrier focused on home insurance for catastrophe-exposed areas, has closed a $175 million private placement catastrophe bond transaction.
The transaction represents Kin’s first foray into the capital markets, with the coverage set to provide the Kin Interinsurance Network with indemnity-based coverage for large hurricanes and other named storms affecting Florida.
The cat bond was issued by Hestia Re Ltd., a newly established special purpose insurer in Bermuda, which has entered into a multi-year reinsurance arrangement with Kin.
Although the transaction was announced with an initial target of $100 million, the catastrophe bond was upsized to $175 million based on the support received from investors.
Swiss Re Capital Markets and TigerRisk Capital Markets & Advisory acted as joint structuring agents and joint bookrunners on the transaction.
“Our first catastrophe bond will be an integral part of Kin’s broader reinsurance program which protects our company,” said Angel Conlin, Chief Insurance Officer at Kin.
“The transaction also highlights our strong support from capital market investors, continued backing by industry-leading reinsurers, and ability to bring more capital directly into our growing business, which will be important as we explore subsequent alternative risk transfer options in the future.”
“Swiss Re Capital Markets is proud to have advised Kin in structuring and placing its first-ever catastrophe bond,” added Andras Bohm, Head ILS Structuring for the Americas of Swiss Re Capital Markets.
“The success of the transaction and upsize to $175 million are a testament to ILS investors’ willingness to provide catastrophe risk capacity in support of Kin’s fast-growing and technology-driven direct-to-consumer business model.”
Philipp Kusche, Global Head of ILS and Capital Solutions at TigerRisk Capital Markets & Advisory, also commented: “We are delighted to have supported Kin in its inaugural catastrophe bond transaction, which comes on the heels of the establishment of Hestia Re.”
“It has been exciting to work with Kin in bringing their unique underwriting approach to the capital markets, and we fully expect the enthusiasm to support this transaction to extend into the June 1 renewal of Kin’s traditional reinsurance program.”