SURE & Elevate target third cat bond of year, up to $100m Gateway Re 2024-3 – Artemis.bm


The SureChoice and Elevate reciprocal exchanges, that are linked to expansive coastal MGU SageSure, are back for what will be their third catastrophe bond of the year, seeking another up to $100 million in named storm reinsurance from a Gateway Re Ltd. (Series 2024-3) cat bond issuance.

The two reciprocal exchanges have already been the ceding entities behind a $250 million first-event Gateway Re Ltd. (Series 2024-1) named storm cat bond and a $130 million Gateway Re Ltd. (Series 2024-2) second-event deal this year.

This is already the eighth catastrophe bond to be sponsored by entities affiliated with MGU SageSure in just over two years, having first sponsored a Gateway cat bond back in May 2022, demonstrating the organisations appetite for fully-collateralized reinsurance and protection sourced from the capital markets.

It’s the sixth cat bond to benefit the SureChoice Underwriters Reciprocal Exchange and the fourth that also benefits the Elevate Reciprocal Exchange.

Find details on all of the Gateway series of transactions in our extensive catastrophe bond Deal Directory.

Bermuda-based Gateway Re Ltd. is the issuer of choice for this latest catastrophe bond to support the reinsurance needs of the SageSure linked underwriting entities.

Gateway Re Ltd. will issue a single tranche of Series 2024-3 Class AAA cat bond notes, with a target to secure between $50 million and $100 million of reinsurance, we are told.

These notes will be sold to catastrophe bond funds and investors and the proceeds will collateralize reinsurance agreements between the SPI and the ceding entities, which are the SureChoice Underwriters Reciprocal Exchange and the Elevate Reciprocal Exchange.

The Class AAA Series 2024-3 notes issued by Gateway Re Ltd. are set to reinsurer the reciprocals against losses from named storms affecting the US states of Alabama, North and South Carolina, Louisiana, Mississippi, and Texas.

Like the 2024-1 cat bond, we are told that at a reset, additional states of New York and Virginia can be added to the coverage, at the cedents request.

The notes will provide a multi-year source of indemnity trigger and per-occurrence named storm reinsurance, with the term set to be three years to July 8th 2027, we understand. This is the same maturity date as the 2024-1 first-event cat bond, so aligns the coverage from this new deal.

The Class AAA tranche of notes will have an initial attachment point at $1.376 billion of losses, exhausting at $1.576 billion, sources said.

Which gives the up to $100 million of Class AAA notes an initial attachment probability of 1.28%, an initial expected loss of 1.16%, while they are being offered to cat bond investors with spread guidance in a range from 5.25% to 6%.

As a result, these new AAA notes sit higher up and span a wider layer than the two tranches from the Gateway Re 2024-1 deal.

As SageSure and its underwriting entities return to the catastrophe bond market again in 2024, the group is becoming a prolific sponsor in the market, clearly seeing the benefits of locking in multi-year and fully-collateralized reinsurance and enjoying its strengthening relationship with the ILS market and its investors.

You can read all about this new Gateway Re Ltd. (Series 2024-3) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.

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