Global P&C insurer AmTrust Financial Services is back in the catastrophe bond market for the first time since 2017, with a target to secure $100 million or more in northeast US named storm reinsurance protection from this Solis Re Ltd. (Series 2025-1) issuance, Artemis has learned.
AmTrust was last in the catastrophe bond market back in 2017, when the company sponsored an innovative Fortius Re II Ltd. (Series 2017-1) transaction that secured it both property and workers compensation reinsurance coverage from the capital markets.
Now, the company has returned with a goal to secure named storm reinsurance from the capital markets to cover its portfolio of commercial, specialty programs and E&S business in the United States northeast, we understand.
Solis Re Ltd. has been established in Bermuda for the issuance of catastrophe bond notes and the target for this initial issuance is for a single $100 million or larger Series 2025-1 Class A tranche of notes to be issued and sold to investors.
The proceeds of the sale of the notes will collateralize a reinsurance agreement between Solis Re Ltd. and the ceding insurer, which is AmTrust’s subsidiary Technology Insurance Company, Inc.
Technology Insurance Company, Inc. pools risks from across a range of underwriting subsidiaries within the AmTrust Financial Services group.
The $100 million of notes will ultimately provide AmTrust with a multi-year source of indemnity and per-occurrence based fully-collateralized named storm reinsurance protection.
We understand the covered area is most of the US northeast states, including Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New York, New Jersey, New Hampshire, Pennsylvania, Rhode Island, Vermont, Virginia and West Virginia.
The reinsurance protection from the Solis Re 2025-1 catastrophe bond will protect AmTrust, via Technology Insurance Company, for a three year term, with maturity scheduled for the end of June 2028.
The Solis Re Series 2025-1 Class A notes would attach their coverage after $250 million of losses and exhaust at $450 million, so will occupy a share of a $200 million layer of the reinsurance tower, giving them room to upsize, we are told.
The currently $100 million of Solis Re 2025-1 Class A notes come with an initial attachment probability of 0.96%, an initial expected loss of 0.68% and are being offered with initial price guidance for a spread of between 3.5% and 4%, sources said.
It’s always good to see a large P&C insurance player like AmTrust returning to the catastrophe bond market after a hiatus away, as it demonstrates the company seeing the value in further diversifying its sources of reinsurance capital using the insurance-linked securities (ILS) market, in fully securitized cat bond form.
Read all about this Solis Re Ltd. (Series 2025-1) catastrophe bond comes to market and you can read about this and every other cat bond deal in the Artemis Deal Directory.
