Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, is back in the catastrophe bond market with an initial target to secure $100 million or more in aggregate Japan earthquake reinsurance from the capital markets through a issuance.Zenkyoren continues to be the buyer of one of the largest catastrophe reinsurance towers in the world and has been accessing the capital markets using catastrophe bonds since 2003.This new Nakama Re 2025-1 issuance will be the that we have listed in our extensive Deal Directory.Zenkyoren has for a third time returned to use its Singapore domiciled special purpose reinsurance vehicle to issue its latest catastrophe bond.

Zenkyoren first sponsored a cat bond out of Singapore in 2021, after which it then used its Bermuda SPI in 2023, but then used Singapore again in 2024 and now again in 2025.This is the first Singapore located catastrophe bond issuance since Zenkyoren’s last, one year ago.For Zenkyoren, the benefit of utilising Singapore lies in accessing the country’s insurance-linked securities (ILS) grant scheme, it seems, being an Asian sponsor of cat bonds featuring Asian catastrophe risk.

Singapore based structure Nakama Re Pte.Ltd.is targeting the issuance of a single tranche of Series 2025-1 Class 1 notes, through which the target is to raise at least $100 million in capital to collateralize a reinsurance agreement between the issuing vehicle and cedent Zenkyoren, we understand.

As with previous Nakama Re cat bonds, Zenkyoren is again seeking Japanese earthquake reinsurance protection structured on a three-year aggregate, indemnity triggered basis.With the full term of coverage set to run across five years, to mid-April 2030, across three annual aggregate risk periods, each three-years in length, that overlap across the full term.Again, like its other recent catastrophe bonds, Zenkyoren seeks reinsurance protection that includes coverage for losses from Japanese earthquake shake and related perils, including tsunami’s, fire, flooding and sprinkler leakage, we are told.

The targeted $100 million tranche of Series 2025-1 Class 1 notes that Nakama Re Pte.is offering will have an initial attachment point of JPY 2.15 trillion of losses and cover a layer to JPY 2.4 trillion, which is a layer above Zenkyoren’s 2023 and 2024 cat bonds, but sits next to a 2021 issuance.The notes will sit within a JPY 250 billion layer of the Zenkyoren reinsurance tower and also feature an aggregate franchise deductible of JPY 270 billion, the same as recent deals.

As a result, the Series 2025-1 Class 1 notes will have an initial annualised attachment probability of 0.77%, an initial annualised expected loss of 0.74% and they are being offered to cat bond investors with spread price guidance in a range from 2% to 2.5%, sources said.For comparison, the cat bond notes issued one year ago (which were also a three-year aggregate deal) launched with an initial annualised expected loss of 0.79% and priced to pay investors a spread of 2.35%.None of Zenkyoren’s outstanding $1.15 billion in Nakama Re catastrophe bonds mature this year, so this new 2025-1 issuance will be additional to the cat bond coverage the mutual insurer benefits from.

But, in 2026, Zenkyoren’s $775 million will mature in October, so it will be interesting to see whether the insurer opts to upsize this new deal, to increase coverage that is more closely aligned with its typical April 1st reinsurance renewal.Given the size of its reinsurance tower, cat bonds are still a relatively small component of Zenkyoren’s overall catastrophe reinsurance arrangements, so it’s encouraging to see the insurer back and looking to build on that in 2025 with its fifteenth cat bond sponsorship and the eleventh under the Nakama Re name.You can read all about this catastrophe bond and every other cat bond transaction 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.