Spinnaker Insurance Company, a wholly owned subsidiary of Hippo Holdings Inc., announces the successful sponsorship of Mountain Re Ltd. Series 2023-1 catastrophe bonds.
As part of the transaction, Spinnaker entered into a reinsurance contract with Mountain Re that offers protection against various perils, including named hurricanes, fires after an earthquake, severe thunderstorms, and winter storms.
The transaction also provides Spinnaker with a diversification of risk transfer capacity and access to capital markets.
According to Hippo, the $110 million cat bond is a 10% increase from the initial $100 million target of the transaction.
Hippo President and CEO Rick McCathron, commented, “Successfully sponsoring our first catastrophic bond demonstrates our maturity as a company.
“This is the direct result of our geographic diversification efforts and will serve as an important part of our reinsurance program.
“Mountain Re is a multi-year, capital-backed reinsurance source that provides reinsurance coverage against catastrophic events for Hippo Insurance Service owner products underwritten by Spinnaker.”
Hippo suggests that the Class A Notes issued by Mountain Re Ltd. reached 6.75%, with an initial base expected loss of 0.86% and an indemnity trigger over a three-year term with Class A Notes scheduled to mature on June 5th, 2026.
The cat bond was successfully closed on May 31, 2023. GC Securities, a division of MMC Securities LLC, is the sole structuring agent and bookrunner.
Shiv Kumar, President of GC Securities, said, “Current market conditions require creative risk transfer structures such as those provided by Mountain Re.
“We are very pleased to support Spinnaker as it provides innovative insurance solutions and reinsurance market access to MGA, program administration and insurtech companies.”
You can read all about this Mountain Re Ltd. (Series 2023-1) catastrophe bond and every other bond bond transaction in the Deal Directory of our sister publication, Artemis.