SageSure and Anchor Re spearhead innovation with $50m cat bond closure

July 25, 2023

SageSure and Anchor Re have jointly announced the triumphant finalisation of Anchor Re’s inaugural $50m catastrophe bond.

This remarkable financial feat, titled Gateway Re Series 2023-3, was agreed upon at a value below the initial guidance, a testament to significant investor backing. The catastrophe bond (cat bond) offers multi-year retrocessional protection against a series of US-named storms for SageSure’s carrier partners, SURE and SafePort.

What sets this bond apart in the insurance-linked securities (ILS) market is its unique construction. The bond utilises Property Claim Services (PCS) county-level cat loss reporting as the trigger, an approach that magnifies Anchor Re’s ability to efficiently manage basis risk and capital while simultaneously providing enhanced transparency to ILS investors.

The proceeds from the cat bond will be used to fortify SageSure’s and Anchor Re’s ability to provide support for SURE and SafePort’s reinsurance programmes, and maximise capital and capacity efficiency.

Travis Lewis, director of Anchor Re, commended the bond, stating, “The support from investors for our first cat bond reinforces our ability to provide support for SURE and SafePort’s reinsurance programmes and maximises capital and capacity efficiency.”

The completion of this deal marks SageSure’s fourth venture into the ILS market in 2023, demonstrating their sophisticated approach to reinsurance arrangements. Earlier this year, SageSure bolstered SURE with a $355m Gateway Re 2023-1 cat bond, a $100m Gateway Re 2023-2 second and subsequent event cat bond, and SafePort’s premier $125m Gateway Re II 2023-1 cat bond.

As with previous Gateway Re transactions this year, Swiss Re Capital Markets played a pivotal role as the sole structuring agent and bookrunner. Jean-Louis Monnier, head of ILS at Swiss Re, commended the structural features of the fourth issuance under the Gateway Re programme, which benefit ILS investors and provide valuable sideways coverage for Anchor Re.

Keep up with all the latest FinTech news here.