SageSure, a provider of catastrophe-exposed property insurance, and SureChoice Underwriters Reciprocal Exchange, a policyholder-owned insurer, have announced that SURE has closed a $100 million catastrophe bond to provide reinsurance for second and subsequent events.
The catastrophe bond was upsized by 33% from the transaction’s initial $75 million target, with pricing more competitive than the initial guidance.
With this issuance, SageSure has helped secure a $580 million total in Gateway Re issuances for its carrier partners this year. The second cat bond issued this year by Gateway Re demonstrates SageSure and SURE’s diversified approach to securing growth capacity. This also demonstrates the company’s strategy to leverage alternative capital markets for optimal placements when traditional reinsurance markets tightened in capacity.
For SURE, the Gateway Re 2023-2 catastrophe bond marks its second return to the global insurance-linked securities (ILS) market in 2023. This comes after closing the $355 million Gateway Re Series 2023-1 catastrophe bond in February.
Ed Konar, the President of SURE, commented, “We are excited to see the continued support for SURE’s reinsurance program from the ILS investor community. The second and subsequent event catastrophe bond provides a necessary layer of additional protection during the 2023 Atlantic hurricane season.”
Whereas the Gateway Re 2023-1 issuance provides multi-year capacity, the Gateway Re 2023-2 Class C notes cover $100 million of second and subsequent event losses in excess of the $70 million attachment level for named storms during a single hurricane season across Alabama, North and South Carolina, Louisiana, Mississippi, and Texas.
Terrence McLean, CEO and co-founder of SageSure, said, “Catastrophe bonds have become an important source of additional catastrophe risk capacity for SageSure and our carrier partners. As we’ve seen traditional reinsurance markets harden, we are grateful for the ongoing ILS investor support that enables us to provide underwriting capacity in challenging markets.”
Swiss Re Capital Markets have partnered with SURE and SageSure for the transaction as the sole structuring agent and book-runner again. Jean-Louis Monnier, the Global Head of ILS at Swiss Re, commented, “Swiss Re Capital Markets is proud to have led the placement of SURE and SageSure’s innovative second and subsequent event catastrophe bond solution, the third issuance this year by the Gateway Re franchise. The success of the placement demonstrates that alternative capital can be an efficient source of reinstatement capacity and underlines the investor confidence in SURE, SageSure, and the Gateway Re franchise.”