Alternative Risk Transfer

USAA has successfully secured the upsized target of $300 million (versus the originally targeted $225 million) of collateralized multi-peril property per-occurrence indemnity-trigger catastrophe reinsurance with its new four-year two-tranche Residential Reinsurance 2021 Limited (Series 2021-2) transaction, which also priced at the reduced coupon levels. It covers U.S. tropical cyclones, earthquakes (plus fire following), severe thunderstorm, winter storm, wildfire, volcanic eruption, meteorite impact, other perils (all including auto & renter policy flood losses).

"The John Townsend Trust Pension and Assurance Scheme has agreed a £30 million full scheme buy-in with Legal & General, moving out of the assessment period at the Pension Protection Fund (PPF). The transaction covers the benefits of more than 280 pension scheme members and is a first step towards a buyout, which is expected by the end of 2022. The scheme entered PPF assessment in December 2015, following the insolvency of its sponsor John Townsend Trust, which operated the Royal School for Deaf Children in Margate."

"Catastrophe bonds and other insurance or reinsurance related solutions can be a bridge between the private capital markets and humanitarian project funding needs, according to David Howden, CEO of Howden Group... 'We can't keep relying on government and charities to find more money - there is far more private capital available than public - and there is huge appetite from this capital to invest in ESG, but it needs a market. So I'm here today to ask for your help in creating that market.'"

Allstate is looking to issue a $350 million Sanders Re II Ltd. (Series 2021-2) two-tranche catastrophe bond to provide both multi-peril per-occurrence and aggregate reinsurance protection on an indemnity trigger basis across a range of US named perils across a three year and four month term. The first four months will cover only covering the insurer on a per-occurrence basis and the remaining three years will provide both per-occurrence and aggregate reinsurance protection.

French mutual insurance society Covéa is looking to issue €200 million Hexagon III Re Pte. Ltd. (Series 2021-1) two-tranche four-year catastrophe bonds out of Singapore. One tranche is focused solely on windstorm coverage in France, Monaco and Andorra and the other includes hail and other natural peril events, such as snowfall, earthquake, frost, ice, flooding, volcanic risks, mudslides and avalanches. Both will provide Covea with indemnity reinsurance protection on a per-occurrence basis.

The London Bridge Risk Protected Cell Company insurance-linked securities structure that enables quota share access to the Lloyd's insurance and reinsurance market for third-party investors helps to "simplify" investment structures for the first backer of a deal, Ontario Teachers' Pension Plan. Coverage begins in 2021 and is expected to be expanded in 2022, with initial capital in excess of £100 million expected to be deployed and which is expected to grow over time.

Google's parent Alphabet is seeking to to issue $250 million or more Phoenician Re Ltd. (Series 2021-1) catastrophe (CAT) three-year single-tranche bonds. This is going to be the third issuance of a series of catastrophe bond notes with Alphabet has sponsored to provide California earthquake insurance protection, this time on a per-occurrence basis and using an indemnity trigger.

US insurer Farmers Insurance Group, a subsidiary of Zurich Insurance Group, is seeking to issue at least $100 million Topanga Re Ltd. (Series 2021-1) four-year two-tranche CAT bonds, in its first entry into this market. It will cover certain losses from named storms, earthquakes, severe weather and wildfires affecting the United States, on a per-occurrence and indemnity trigger basis.

The Reuters Supplementary Pension Scheme agreed to a £310 million full buy-in with Legal & General Assurance Society. The deal involved the assessment and insurance of a complex multi-currency benefit structure.

Securian Financial Group, the life insurance subsidiary of Minnesota Life Insurance Company is looking to issue $100 million or more of La Vie Re Limited (Series 2021-1) three-year mortality bonds. It will provide extreme mortality protection on an indemnity basis, with the notes triggering based on the Minnesota Life's annual loss ratio and for the covered business.

French mutual insurance society Covéa is has had to reduce its target for its Hexagon III Re Pte. Ltd. (Series 2021-1) two-tranche four-year catastrophe bonds out of Singapore, from €200 million to between €150 million and €190 million. The Class B tranche is focused solely on windstorm coverage in France, Monaco and Andorra, and the Class A tranche includes hail and other natural peril events, such as snowfall, earthquake, frost, ice, flooding, volcanic risks, mudslides and avalanches. Both will provide Covea with indemnity reinsurance protection on a per-occurrence basis.

Global reinsurance firm Ariel Re is looking to issue $150 million of Titania Re Ltd. (Series 2021-2) three-year single-tranche catastrophe bonds. They will cover certain losses from U.S. 50 state, Puerto Rico, U.S. Virgin Islands, D.C. and Canada named storms and earthquakes.

Allstate has increased the target issuance size from $350 million to $400 million for its Sanders Re II Ltd. (Series 2021-2) two-tranche catastrophe bond. It will provide both multi-peril per-occurrence and aggregate reinsurance protection on an indemnity trigger basis across a range of US named perils across a three year and four month term. The first four months will cover only covering the insurer on a per-occurrence basis and the remaining three years will provide both per-occurrence and aggregate reinsurance protection.

French mutual insurance society Covéa issued €153 million Hexagon III Re Pte. Ltd. (Series 2021-1) two-tranche four-year catastrophe bonds out of Singapore The original target had been €200 million. The Class B tranche is focused solely on windstorm coverage in France, Monaco and Andorra, and the Class A tranche includes hail and other natural peril events, such as snowfall, earthquake, frost, ice, flooding, volcanic risks, mudslides and avalanches. Both will provide Covea with indemnity reinsurance protection on a per-occurrence basis.

UK pension scheme derisking activity picked up in the third quarter of 2021, with 17 buy-in and buyout transactions being signed, worth £4.9 billion, which is more than double the volume of $2.7 billion in the second quarter. The third quarter transactions included three large buy-ins that were worth almost £1 billion each, including the £925 million Legal & General Group UK Pension and Assurance Fund assured payment policy transaction with Legal & General Assurance Society.

"Much has changed over the past 20 years, and the world of defined benefit pensions is no exception - 2001 witnessed the birth of liability-driven investing, which has since grown to become a core component of DB portfolios."

American Family Mutual Insurance Company is looking to issue at least $100 million of Four Lakes Re Ltd. (Series 2021-1) three-year single-tranche multi-peril CAT bonds. They will cover losses from named storms, earthquakes, severe thunderstorms, winter storms, wildfires, volcanic eruptions and meteorite impacts across the United States, on an indemnity and per-occurrence trigger basis.

Warehousing and supply-chain focused real estate owner and investor Prologis is looking to issue at least $95 million Logistics Re Ltd. (Series 2021-1) three-year single-tranche CAT bonds. They will provide Prologis with US earthquake insurance protection, covering the 50 states (with California the peak exposure) on an indemnity and per-occurrence basis.

Google's parent Alphabet is looking to upsize its Phoenician Re Ltd. (Series 2021-1) three-year single-tranche CAT bonds from $250 million to $285 million. This will be the third issuance of a series of CAT bond notes with Alphabet has sponsored to provide California earthquake insurance protection, this time on a per-occurrence basis and using an indemnity trigger.

ARX Holding, the Progressive-owned parent of American Strategic Insurance Group, is looking to issue at least $100 million Bonanza Re Ltd. (Series 2021-1) one-year two-tranche zero-coupon discount CAT bonds. Both tranches of notes will cover losses from U.S. named storms, severe thunderstorms, winter storms, wildfires and earthquakes, on an indemnity trigger basis.