Italian and global insurance giant Assicurazioni Generali S.p.A.is looking to renew its soon to mature green catastrophe bond with a new EUR 200 million transaction now in the market, that targets European windstorm and Italy earthquake reinsurance for the company, Artemis can report.Generali launched its own framework for Green insurance-linked securities (ILS) back in 2020, and in 2024 the green ILS framework was updated to incorporate new features and expand its scope, .The insurer sponsored its first green catastrophe bond issuance in 2021, the €200 million transaction, securing reinsurance protection against certain losses from European windstorms and Italian earthquakes across a multi-year term.

That deal matures after this June and so now it appears Generali has returned to sponsor a renewal with this Lion Re DAC cat bond issuance, which now falls under the updated green, social and sustainable ILS framework.Under the framework, Generali can free up capital thanks to the cat bond to be put to work in sustainable investment., under regulatory capital relief calculated on the basis of its Solvency Capital Requirement at the inception of the cat bond risk period.

That freed up capital was allocated to a sustainable investment deemed to make a positive environmental impact.So it’s good to learn that Generali has come back to renew its catastrophe bond coverage and to continue pushing the boundaries on the sustainable investment side of the insurance-linked securities (ILS) market with this new deal.We’re told that Generali has established a new designated activity company in Ireland for its latest catastrophe bond issuance, Lion Re DAC.

Lion Re DAC is looking to issue two tranches of Series 2025-1 notes that will be sold to investors and the proceeds used to collateralize reinsurance agreements for sponsor Generali.The notes are designed to provide Generali with a four year source of collateralized reinsurance protection against losses from windstorms across Europe and earthquakes in Italy, the same perils as the soon to mature Lion III Re deal.The reinsurance protection will be on an indemnity trigger and per-occurrence basis for both of the tranches of notes, we understand.

Lion Re DAC is offering a EUR 125 million Class A tranche of Series 2025-1 notes that will provide Generali with both European windstorm and Italy quake protection, with windstorm coverage attaching at EUR 900m and exhausting at EUR 1.1bn, while earthquake protection would attach at EUR 600m and exhaust at EUR 800m, we are told.As a result, the Class A notes will have an initial attachment probability of 3.64%, an initial expected loss of 3% and are being offered to cat bond investors with price guidance in a range from a spread of 5.5% to 6.25%.A EUR 75 million Class B tranche of notes will provide Generali with only Italy earthquake protection, attaching slightly lower down at EUR 400m and exhausting coverage at EUR 500m, we are told.

The Class B notes will have an initial attachment probability of 2.64%, an initial expected loss of 2.33% and are being offered to cat bond investors with price guidance in a range from a spread of 5.25% to 6%, sources said.For comparison, the soon to mature Lion III Re cat bond featured a single tranche of notes exposed to both perils and had an initial expected loss of 2.99% and priced to pay investors a spread of 3.5%.Under the terms of Generali’s Green, Social and Sustainability Insurance-linked Securities Framework, the new Lion Re DAC cat bond will free up an amount of the insurers own capital equal to its limit which will then be allocated to eligible projects by the company.

While the collateral will be invested in EBRD notes.The insurer will also report on the allocation of the freed up capital and the project benefits derived from that, we understand.It’s encouraging to see Generali continuing to push the boundaries of ESG within the catastrophe bond market, by following its strict framework and attempting to deliver broader sustainable benefits while also benefiting from the capital markets backed reinsurance the catastrophe bond will provide.

You can read all about this new catastrophe bond and every other cat bond ever issued 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.