Palomar Holdings, Inc., through its wholly-owned subsidiaries Palomar Specialty Insurance Company and Palomar Excess and Surplus Insurance Company, has closed a $400 million 144A catastrophe bond transaction through Torrey Pines Re Pte. Ltd.
Palomar and Torrey Pines Re, a special purpose insurer established in Singapore, entered into a multi-year reinsurance arrangement to provide the former with indemnity-based reinsurance for earthquake risks.
The catastrophe bond, which is the second time Palomar has entered the market after its inaugural $166 million issuance in 2017, was designed to seamlessly fit into the company’s existing traditional catastrophe reinsurance programme.
This latest deal, Torrey Pines Re Pte. Ltd. (Series 2021-1), issued two $200 million tranches of notes that both provide protection against earthquakes in the U.S. over a three-year term.
Investor appetite has been strong in the catastrophe bond space during the opening quarter of the year, and Palomar’s deal, like many others during the period, upsized while marketing.
Mac Armstrong, Chairman and Chief Executive Officer (CEO) of Palomar, commented: “The Torrey Pines Re transaction allows Palomar to further build upon its leadership position in the earthquake insurance space. We believe the success of the issuance reflects catastrophe bond investor confidence in our ability to underwrite this line of business.
“The multi-year protection enables us to strengthen our robust reinsurance program and provide enhanced visibility into our results, which in turn benefits our customers, distribution partners and investors.”
Heath Fisher, President of Palomar, added: “We are encouraged by the warm investor reception of our return to the catastrophe bond market. This outcome underscores the differentiated nature of our insurance portfolio and strong demand for innovative earthquake products.
“We pride ourselves on the strength of our reinsurance program, and this issuance represents an important component of our strategy that affords multi-year, insurance-linked securities (“ILS”) capacity to bolster our panel of reinsurance capital providers.”
GC Securities, a division of MMC Securities LLC and TigerRisk Capital Markets & Advisory acted as joint structuring agents and joint bookrunners; MMC Securities LLC acted as the sole initial purchaser.
