NCJUA returns for first catastrophe bond since 2013, $125m Longleaf Pine Re – Artemis.bm

The North Carolina Joint Underwriting Association (NCJUA) has returned to the catastrophe bond market for the first time since 2013, seeking $125 million of more in aggregate named storm reinsurance from this Longleaf Pine Re Ltd. (Series 2024-1) issuance.

Previously, the North Carolina Joint Underwriting Association (NCJUA) had sponsored catastrophe bonds alongside the North Carolina Insurance Underwriting Association (NCIUA), the last being the Tar Heel Re 2013 cat bond issuance.

The NCIUA returned in 2019 and since has sponsored catastrophe bonds on its own under the Cape Lookout Re series of deals.

But, this Longleaf Pine Re catastrophe bond is the first time we’ve seen the NCJUA return, which is encouraging to see.

The North Carolina Joint Underwriting Association (NCJUA) is also also known as the FAIR (Fair Access to Insurance Requirements) Plan. It is a tax exempt association of insurance companies that are licensed to write and engage in writing property insurance coverage in the state of North Carolina.

Longleaf Pine Re Ltd. has been established in Bermuda for this catastrophe bond issuance for the NCJUA, Artemis has learned.

Hannover Re is acting as a ceding reinsurer, to enter into a retrocessional agreement with Longleaf Pine Re and a reinsurance agreement with the NCJUA, to front the capital markets and pass on the protection.

A single tranche of Class A notes are set to be issued, to provide the NCJUA with $125 million or more in fully-collateralized catastrophe reinsurance from the capital markets.

The coverage will be for named storm losses, on an indemnity trigger and annual aggregate basis, we understand, with covered events needing to result in an ultimate net loss of at least $25 million to qualify for aggregation.

The covered area is solely the state of North Carolina.

The Class A notes would attach at $170 million of losses to the NCJUA and exhaust their coverage at $330 million, we are told.

The $125 million of Longleaf Pine Re 2024-1 cat bond notes come with an initial attachment probability of 7.72%, an initial expected loss of 5.68% and are being offered to cat bond investors with price guidance in a range from 15% to 17%, we understand.

It’s good to see the NCJUA returning, to bring more capital markets backed reinsurance support to North Carolina property owners through a catastrophe bond.

You can read all about this new Longleaf Pine Re Ltd. (Series 2024-1) catastrophe bond and every other cat bond issued in the extensive Artemis Deal Directory.