Hannover Re has returned to the catastrophe bond market in search of $175 million or more in broad retrocession covering worldwide peak perils on an annual aggregate basis, from a transaction that is being offered to investors, Artemis can report.This will be the fourth 3264 Re catastrophe bond to benefit Hannover Re, as the reinsurer continues to partner with capital market investors for its own retrocessional reinsurance needs and as a facilitator in the insurance-linked securities (ILS) market.With this fourth 3264 Re Ltd.catastrophe bond, Hannover Re has expanded the range of covered perils for one tranche on offer to include many of the worldwide peak peril categories, similar to its 2022 transaction under the same structure, we are told.

In early 2020, Hannover Re sponsored a $150 million cat bond transaction that secured it multi-year retrocessional protection against aggregate losses from U.S.named storm risks, U.S.and Canadian earthquake risks and European windstorm risks, on an industry loss trigger basis.

The reinsurer then returned for 2022 and broadened the perils to become effectively a worldwide peak perl deal, still annual aggregate in nature and secured $100 million of retro with the issuance.Last year, the scope of coverage for a third 3264 Re cat bond was significantly narrower, being just northeast US named storm and Gulf of Mexico named storm risks and $140 million of retro was secured from the deal.Now, Hannover Re is back and looking to renew the broader, worldwide peak peril transaction with one tranche of its latest 3264 Re cat bond sponsorship, as that $100 million Series 202-1 cat bond matures later this month, while a second tranche is focused on North American earthquake risks only.

3264 Re Ltd., a Bermuda based special purpose insurer, is set to offer and issue two tranches of Series 2025-1 notes to cat bond investors, with the proceeds from their sale set to collateralize reinsurance agreements to benefit sponsor Hannover Re.With $175 million of notes on offer across the two tranches, this deal could be the largest from 3264 Re to-date.The two tranches of Series 2025-1 notes being issued by 3264 Re Ltd.

are designed to provide Hannover Re with a capital markets backed source of multi-year annual aggregate retrocessional reinsurance.The list of covered perils between the two tranches is long and global in nature, being: North America named storms and earthquake; US severe thunderstorm and winter storm; Puerto Rico and US Virgin Islands quake; Japan typhoon and earthquake; Canada severe thunderstorm and winter storm; European windstorm; Italy quake; Turkey quake; Australia tropical cyclone and earthquake; New Zealand earthquake.There is one notable admission in the covered perils compared to the 2022 cat bond, that of US wildfire risks, otherwise it is broadly the same although more Canadian perils are said to be covered this time.

All perils are being covered on an annual aggregate basis using either PCS or PERILS industry loss index triggers, we understand.The retrocessional coverage for Hannover Re will run across three years, with three annual risk periods that start on February 1st and end January 31st, up to Jan 31 2028.A $75 million tranche of Class A notes cover all of the worldwide perils mentioned above with event caps and franchise deductibles at a range of index levels for each.

The Class A notes have an initial attachment probability of 10.44%, an initial expected loss of 7.5% and are being offered with spread price guidance in a range from 20.5% to 21.5%, sources said.A $100 million tranche of Class B notes will only cover the North America earthquake peril, including Canada.The Class B notes have an initial attachment probability of 1.01%, an initial expected loss of 0.92% and are being offered with spread price guidance in a range from 3.5% to 4%%, we understand.

It’s good to see Hannover Re returning and looking to renew the maturing worldwide peak peril coverage the 2022-1 cat bond, while also expanding its earthquake protection with the second tranche.You can read all about this new catastrophe bond from Hannover Re and every other cat bond issued in the Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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