QBE Insurance Group, the Australia headquartered global insurance and reinsurance company, is back within the catastrophe bond marketplace for the primary time since 2013, with a goal to secure $250 million or more in retrocession from a Bridge Street Re Ltd. (Series 2025-1) issuance, Artemis has learned.
QBE was last within the catastrophe bond market in late 2013, when it secured $250 million of US and Australian multi-peril protection from the VenTerra Re Ltd. (Series 2013-1) deal.
Now, the corporate is back and this time leveraging two latest Bermuda Class 4 entities it has recently arrange so as to add efficiency to the way in which it organises its reinsurance offerings and balance-sheet needs, QBE Capital Ltd. and QBE Capital (Global) Ltd., that are the 2 cedents to this latest Bridge Street Re cat bond.
Bridge Street Re Ltd. has been established to be a special purpose insurer (SPI) in Bermuda and it’s trying to issue a single tranche of Series 2025-1 Class A notes, that shall be sold to investors and the proceeds used to collateralize the underlying retrocessional reinsurance arrangements with the 2 QBE Capital entities, we understand.
The targeted Bridge Street Re 2025-1 Class A notes are designed to supply QBE with a multi-year source of protection, on an industry-loss trigger and annual aggregate basis across a roughly three-year term, from issuance to the top of 2027, we’re told.
The cat bond notes will provide QBE territory-weighted retro reinsurance against major industry loss events attributable to named storms and earthquakes throughout the US, Puerto Rico, DC, the US Virgin Islands and Canada, over the chance period.
Being annual aggregate in nature, sources said a franchise deductible shall be in place for each of the covered perils, set at $10 billion per industry-loss event, with PCS the reporting agent.
The $250 million of Class A notes Bridge Street Re Ltd. is ready to issue can have an initial attachment probability of two.03%, an initial expected lack of 1.29% and are being offered to cat bond investors with price guidance in a spread from 4.25% to five%, it is alleged.
It’s encouraging to see QBE return to the catastrophe bond market after greater than a decade without an issuance from the corporate.
It shows one other large re/insurer recognising the worth of diversifying its sources of reinsurance with the support of capital markets, while also indicating that the cat bond market is effectively providing capability for well-structured aggregate protection.
You may read all about this latest Bridge Street Re Ltd. (Series 2025-1) catastrophe bond transaction and each other cat bond ever issued in our Artemis Deal Directory.