American Family Mutual Insurance Company, or AmFam as it is abbreviated, is hoping to upsize its latest catastrophe bond issuance, with the new multi-peril deal now targeting up to $125 million of reinsurance protection for the carrier.AmFam returned to the catastrophe bond market earlier this month, seeking at least $100 million of collateralized reinsurance from a third Four Lakes Re cat bond issuance.With investor appetites for new issues strong, the company is now looking to upsize on this, we’re told, with the new target being $125 million.Once issued, the now up to $125 million of notes will provide AmFam with reinsurance protection, on an indemnity trigger and per-occurrence basis, against losses from named storms, earthquakes, severe thunderstorms, winter storms and wildfires across the United States.

The now expected to be $125 million of million tranche of Series 2022-1 Class A notes that Four Lakes Re Ltd.will issue come with an initial base expected loss of 0.49% and were initially marketed to cat bond investors with price guidance in a range from 6% to 6.5%.We’re now told that the pricing has moved to the top-end of that range, with the notes set to pay investors a 6.5% coupon, which will represent a huge 13.3 times multiple of the base expected loss.

That’s a particularly high multiple, but it is a lower-risk bond, and cat bonds with lower expected losses do tend to come with relatively high multiples.There’s also the fact this cat bond covers perils that are considered less well-modelled, such as wildfires and severe thunderstorms, which may result in investors requiring a higher multiple be paid in the current harder reinsurance market environment.You can read all about this new catastrophe bond from American Family in the Artemis Deal Directory.

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