Groupama, the French mutual insurance and reinsurance company, has now priced its new catastrophe bond to secure the 20% upsized target of €120 million of fully-collateralized convective storm reinsurance protection from the capital markets with this deal, Artemis can report.Groupama returned to the catastrophe bond market in November, with its initial target being to secure €100 million in reinsurance against losses from convective storms in France thought this Quercus II Re cat bond deal.As we reported in our first update on the offering, Groupama’s target was raised, with then up to €120 million of reinsurance protection being sought, while the pricing was updated at the mid-point of guidance.Now, we understand the higher level of reinsurance protection has now been secured, as Groupama’s latest catastrophe bond has been successfully priced to provide the company €120 million of fully-collateralized reinsurance protection.

Groupama has sponsored catastrophe bonds a number of times before and still has a €150 million windstorm reinsurance cat bond that remains in-force at this time..This new Quercus II Re DAC catastrophe bond will protect Groupama against a peril that has been driving rising losses across Europe in recent years, being severe convective storm and with that coverage on an aggregate basis.

It’s notable that this Quercus II Re catastrophe bond is actually the first in the market that will solely cover the severe convective storm peril since 2010.With the notes now priced, Quercus II Re DAC will issue €120 million of notes that will provide Groupama and certain subsidiaries with multi-year, indemnity triggered, annual aggregate reinsurance protection against losses from convective storms affecting France across two annual risk periods from January 2026 through to the end of 2027.The now confirmed to be €120 million of notes Quercus II Re will issue come with an initial expected loss of 1.82% and were first offered to investors with price guidance in a range for a spread of between 10.5% and 11.5%.

That price guidance was updated at the mid-point of initial price guidance, for a risk interest spread of 11% which is where we’re now told the notes have been priced.It’s not the biggest cat bond Groupama has sponsored by quite a margin, but it is a signal of the insurer’s appetite to better protect itself against certain frequency peril events, through a well-structured catastrophe bond.The fact the notes priced at the mid-point of initial guidance also further demonstrates that cat bond investors still have return requirements, particularly for aggregate deals and frequency peril type exposures.

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