Spinnaker Insurance Company, the personal and commercial lines program and fronting specialist, has returned to the catastrophe bond market for its second sponsorship, seeking $100 million or more in US multi-peril collateralized reinsurance from a issuance, Artemis can report.Spinnaker Insurance Company is a specialist in underwriting and connecting P&C program risks with diverse sources of capital and in 2020 was acquired by fast-growing insurtech Hippo Insurance.The company sponsored its debut catastrophe bond almost three years ago, securing $110 million of reinsurance to protect it against multiple US natural perils.That Mountain Re 2023-1 cat bond is scheduled to mature this June, so Spinnaker has returned looking for a renewal of sorts.

But at the same time this new cat bond will also extend the coverage by introducing a new peril as well..Spinnaker is again using its Bermuda based special purpose insurer (SPI) Mountain Re Ltd.

to issue its second catastrophe bond.Mountain Re Ltd.is offering a single Series 2026-1 tranche of Class A notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the issuer and Spinnaker Insurance Company, we understand.

The initial target is for an issuance of $100 million in size or greater.The Mountain Re Series 2026-1 Class A cat bond notes will provide Spinnaker with a capital markets backed source of reinsurance against losses from a range of US perils, being US named storm, earthquake, severe thunderstorm, winter storm and fire.As we said, this second Mountain Re cat bond sees Spinnaker looking to expand on its cat bond coverage, with the introduction of the fire peril for the first time, which we understand is largely wildfire risk and located in California.

We’re told that the notes are most exposed to wildfires on an expected loss contribution basis, with named storm being the next largest contributing peril.The Mountain Re 2026-1 catastrophe bond will provide Spinnaker Insurance with reinsurance on a per-occurrence and indemnity trigger basis over a three-year term, to June 7th 2029.The currently $100 million of Mountain Re Series 2026-1 Class A cat bond notes would attach their coverage at $125 million in losses, covering a share of a layer up to $250 million we are told.

As ever, there could be reinsurance layers that inure to this coverage.The Class A notes will have an initial attachment probability of 4.54%, an initial base expected loss of 2.46% and are being offered to investors with spread price guidance in a range from 7.75% to 8.5%, sources said.For comparison, the Mountain Re 2023-1 cat bond notes that did not include fire coverage had an initial expected loss of 0.86% and priced to pay investors a spread of 6.75%.

But that deal was issued during the hard market peak, so naturally the multiple-at-market would be expected to be considerably lower this time around.It’s good to see Spinnaker returning and looking to expand on the usefulness of its catastrophe bond with a wider range of covered perils.You can read all about this new catastrophe bond, and view details of more than 1,000 other cat bond issuances, in the extensive Artemis Deal Directory..

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