Integral ILS Ltd., an independent alternative investment manager focused on natural catastrophe insurance and reinsurance investments, has entered the catastrophe bond market seeking $200 million in US named storm retrocession from a issuance, Artemis can report.Integral ILS becomes the latest specialist reinsurance and insurance-linked securities investment manager to look to tap into catastrophe bond market appetite for risk, to hedge peak exposures for its managed ILS investment funds.The company also becomes the latest first time cat bond sponsor to enter the market.We’ve seen a number of investment managers that allocate to ILS opportunities access the cat bond market for retro reinsurance hedging capacity in the past, .

In recent weeks, we’ve had discussions with numerous market contacts regarding the potential for cat bonds to prove appealing as hedging tools to managers of collateralized reinsurance portfolios, given the softening of spreads in cat bond issues has made the instrument an efficient way to hedge peak peril exposures at this time.Industry sources have cited a pricing differential between cat bonds and private contracts at this time for well-structured protection, especially when also considering that it may prove attractive right now to lock in multi-year protection from the capital markets at current lower spreads.Integral ILS, the specialist ILS manager launched by well-known industry executives Richard Lowther and Lixin Zeng, is the latest to seek to utilise the catastrophe bond as an efficient hedging tool, seeking protection against certain US named storm risks on an industry-loss trigger basis for peak exposures held in their ILS fund strategies.

Windrose Re Ltd.has been established in Bermuda and is set to become a special purpose insurer (SPI) designed for issuance of programs of catastrophe bond notes to benefit the Integral ILS platform.For this first Series 2026-1 issuance, Windrose Re Ltd.

is offering three tranches of notes that will be sold to cat bond investors and the proceeds used to collateralize certain reinsurance agreements that will ultimately protect the Integral ILS reinsurance underwriting entity Integral Reinsurance Ltd.We understand that Hannover Re is acting as a front for this cat bond issuance and will enter into retrocessional agreements with Windrose Re Ltd.and the vehicle will then pass on the reinsurance to Integral Reinsurance Ltd, which in turn will enable access to the capital markets to reinsure certain funds managed by Integral ILS.

This debut cat bond under Windrose Re Ltd.is seeking to secure $200 million of US named storm retrocessional reinsurance protection for funds managed by Integral ILS, we are told.The three tranches of notes offered will cover different regions of the United States, while all three will utilise state-weighted industry-loss index triggers and the protection they afford will run across roughly three annual risk periods from issuance.

A currently $100 million Class A tranche of Series 2026-1 notes offered by Windrose Re Ltd.will provide Integral Re with per-occurrence protection for named storm industry losses across US northeast states, we understand.The Class A notes will come with an initial attachment probability of 3.48%, an initial base expected loss of 2.88% and are being offered to cat bond investors with price guidance for a risk interest spread of between 4.75% and 5.75%.

A currently $50 million Class B tranche of Series 2026-1 notes under this offering are designed to provide Integral Re with protection on an occurrence basis for named storm industry losses affected the US Gulf Coast (although not Florida’s Gulf coastline), sources said.The Class B notes come with an initial attachment probability of 4.78%, an initial base expected loss of 4.05% and are being offered to cat bond investors with price guidance for a risk interest spread of between 8.25% and 9.25%.The final Class C tranche of Series 2026-1 notes are $50 million in size currently and structured to provide Integral Re with annual aggregate protection against named storm industry losses across all US states except for Florida and Hawaii, we are told.

These notes feature a franchise deductible we understand, derived in industry loss index points.The Class C notes come with an initial attachment probability of 7.93%, an initial base expected loss of 6.97% and are being offered to cat bond investors with price guidance for a risk interest spread of between 11.75% and 12.75%.So with this debut Windrose Re catastrophe bond issuance, Integral ILS is seeking broad industry-loss based US hurricane protection in both occurrence and frequency formats, as it looks to efficiently hedge certain peak US wind exposures held by its range of ILS funds.

It is encouraging to see Integral ILS looking to the catastrophe bond market for efficient retrocessional reinsurance hedging protection, as the team there clearly recognise the opportunity to lock-in long-term protection to the benefit of its ILS funds and their investors.You can read all about this catastrophe bond in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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