Canopius Group, the global specialty insurance and reinsurance underwriter, has returned to the catastrophe bond market looking to renew and upsize on a soon to mature deal with what will be its second cat bond, targeting $125 million or more in protection from this issuance, Artemis has learned.Almost three years ago Canopius sponsored its debut cat bond, securing $75 million of US peak peril retrocessional reinsurance protection from a Finca Re 2022-1 deal.With that transaction set to mature in June 2025, Canopius has returned with a target to secure at least $50 million more in protection from its second cat bond issuance under the Finca Re Ltd.special purpose insurer (SPI).

Canopius is of course also active in the insurance-linked securities (ILS) marketplace through its partnership with third-party investors via a range of ILS structures managed by its Canopius ILS division.For this second catastrophe bond issuance, Finca Re Ltd.is targeting sale of a $125 million or larger tranche of Series 2025-1 Class A notes, that will be sold to cat bond funds and investors, with the proceeds set to be used to collateralize a source of multi-year retro reinsurance for sponsor Canopius, we are told.

We understand that the Finca Re 2025-1 cat bond will provide its protection to Canopius’ underwriting entities, Canopius Re, Canopius US Insurance, Canopius Managing Agents and its Lloyd’s syndicate 4444, to begin.The coverage from its second cat bond will span across a nearly three-year term for Canopius, to the end of May 2028, providing it with multi-year protection against losses from US named storms and earthquakes (including Puerto Rico and the US Virgin Islands).We’re told the protection will be provided on a territory-weighted industry loss trigger basis, while the coverage will be annual aggregate in nature, with an index franchise deductible in-force for qualifying events to be above a certain threshold over each annual risk period.

As with the previous Finca Re cat bond, this Series 2025-1 issuance will see named storm risk as the majority of the expected loss, with Florida making up around 45% of the total exposure.The $125 million, or more, in Series 2025-1 Class A notes that Finca Re Ltd.will issue come with an initial attachment probability of 2.61%, an initial base expected loss of 1.85% and are being offered to cat bond investors with price guidance of 5.25% to 5.75%, Artemis understands.

For comparison, the soon to mature 2022-1 issuance from Finca Re came with an initial expected loss of 1.82% and priced to pay investors a spread of 7.75%, but was slightly more Florida wind exposed, we understood at the time.It’s good to see Canopius returning to renew and increase its catastrophe bond protection in 2025.Read all about this new catastrophe bond transaction from Canopius Group and every other cat bond deal ever issued in the extensive Artemis Deal Directory..

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