AXA XL, the global specialty insurance and reinsurance arm of the AXA Group, has returned to the catastrophe bond market seeking $175 million or more of industry loss based retrocessional protection with a new issuance, as the company demonstrates a desire to secure more capital markets backed cover.AXA XL was last in the catastrophe bond market as a sponsor in December 2023, when it secured $375 million in catastrophe retro protection from a Galileo Re 2023-1 catastrophe bond.That cat bond provided $200 million of four-year protection and $175 million of two-year coverage, so it’s encouraging to see AXA XL return two year’s later with a deal slated to provide four more years of cover to the end of 2029 that is likely to fully replace the maturing tranche of that deal.The 2023 issuance was AXA XL’s first since 2019, but over the year’s , this new cat bond being set to become the seventh.

Like the 2023 deal, this new Galileo Re Ltd.Series 2025-1 cat bond from AXA XL is focused on securing protection from hurricanes and earthquakes on a per-occurrence basis, using an industry loss index trigger, so a retrocessional reinsurance type structure.Bermuda based special purpose insurer Galileo Re Ltd.

is targeting issuance of two tranches of Series 2025-1 notes, that will be sold to investors and the proceeds used to collateralize reinsurance agreements between the issuer and the ceding company, which is XL Bermuda Ltd.The cat bond will also provide cover for AXA XL’s other underwriting entities, such as its Lloyd’s syndicate and other specialty re/insurance entities of the company, sources said.As said, the initial target is to secure $175 million or greater in protection from this new cat bond deal, with the coverage set to run across a four-year term to the end of 2029 for both tranches that are being offered to investors.

That will protect AXA XL’s underwriting entities against losses from U.S., DC, Puerto Rico, and Virgin Islands named storm, as well as U.S.and Canada earthquakes, with slight differences in perils covered by each tranche of notes, all on a per-occurrence and weighted industry loss index trigger basis.Galileo Re Ltd.

is offering an $85 million Class A tranche of Series 2025-1 notes that will provide AXA XL with coverage for losses from named storms only, across the regions mentioned.The Class A notes will span a $100 million layer from a weighted industry loss trigger attachment index point of $1.047 billion, we understand, giving them an initial attachment point of 1.53%, an initial base expected loss of 1.39% and they are being offered to investors with price guidance in a range from 3.25% to 3.75%, we are told.Galileo Re Ltd.

is also offering a $90 million Class B tranche of Series 2025-1 notes that will provide AXA XL with coverage for losses from named storms and earthquakes, across the regions mentioned.The Class B notes will span a wider $200 million layer from a weighted industry loss trigger attachment index point of $620 million, giving them an initial attachment point of 3.6%, an initial base expected loss of 2.95% and they are being offered to investors with price guidance in a range from 5.25% to 6%, sources said.It’s encouraging to see AXA XL returning to renew the coverage that is scheduled to mature, while extending its capital markets backed catastrophe retrocession through this latest cat bond from the company.

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