Great American Insurance Group is back in the catastrophe bond market with a target to secure $225 million or more in multi-peril collateralized reinsurance from the capital markets through a transaction, which will be its fourth cat bond sponsorship, Artemis can report.Great American Insurance Group last sponsored a cat bond in 2021, when it received $305 million in multi-peril reinsurance backing from insurance-linked securities (ILS) investors through a Riverfront Re 2021-1 deal.Prior to that, Great American had sponsored a $190 million cat bond and its debut issuance was a $95 million Riverfront Re 2014-1..

The Riverfront Re 2021-1 catastrophe bond had matured at the end of 2024, so this new Riverfront Re 2025-1 cat bond seems to be an attempt to renew part or all of that important multi-year protection for Great American Insurance, which is part of the American Financial Group of companies.With its fourth in the series, Great American Insurance is again using the Riverfront Re Ltd.vehicle, a Bermuda domiciled special purpose insurer (SPI).

Riverfront Re Ltd.is offering two tranches of Series 2025-1 notes that will be sold to ILS investors and the proceeds used to collateralize reinsurance agreements between the SPI and sponsor Great American.The two tranches of notes will both provide Great American Insurance with multi-year and multi-peril collateralized reinsurance protection from the capital markets across just over a three and a half year term, to end of December 2028, so providing four seasons of hurricane coverage as well as protection for other perils, we understand.

The reinsurance protection from the Riverfront Re 2025-1 cat bond notes will cover Great American’s commercial property book, including certain risks from its National Interstate Insurance and Mid-Continent Casualty insurers, on a per-occurrence and indemnity trigger basis from both tranches.We are told the covered perils are the same as the last tow Riverfront Re cat bond transactions, being U.S., DC and Canada named storms, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impact, and volcanic eruption.Riverfront Re is offering a Class A tranche of Series 2025-1 notes that are targeted to be at least $150 million in size and will cover losses from an attachment point of $400m up to exhaustion at $625m, so have room to upsize, we understand.

The Class A notes come with an initial attachment probability of 0.97%, an initial expected loss of 0.56% and are being offered to cat bond investors with price guidance of 4.75% to 5.75%.A Class B tranche of Series 2025-1 notes is currently sized at $75 million and will cover losses from an attachment point of $275 million, up to an exhaustion point of $400 million, so sit lower down in the reinsurance tower than the Class A notes and are riskier as a result.Again there is room for upsizing.

The riskier Class B notes will have an initial attachment probability of 2.3%, an initial expected loss of 1.54% and are being offered to cat bond investors with price guidance of 7.5% to 8.5%, sources said.The multiples-at-market on offer are considerably higher than Great American’s 2021 catastrophe bond, with that previous issuance having been brought to market at a time .It’s good to see Great American Insurance Group back in the catastrophe bond market again, looking to keep catastrophe bond cover as a core component of its reinsurance tower arrangements for the coming years.

We’ll update you as this new cat bond transaction comes to market and you can read all about this and every other catastrophe bond in the Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.