Germania Insurance, the largest farm mutual insurance company in Texas, is in the market to sponsor its debut catastrophe bond, with a Handshake Re Ltd. (Series 2025-1) issuance that targets $100 million or more in reinsurance for catastrophe losses from multiple perils in its home state, Artemis understands.
The company’s debut cat bond will be issued by a Bermuda based entity named Handshake Re Ltd., with the goal being to secure multi-year fully collateralized catastrophe reinsurance capacity from the capital markets, sources said.
Handshake Re Ltd. is offering a single $100 million Class A tranche of Series 2025-1 notes, that will be sold to investors and the proceeds used to collateralize the necessary reinsurance agreement to pass on the coverage to Germania Insurance and certain of its underwriting subsidiaries.
The notes will provide Germania Insurance with a four year source of reinsurance protection against losses from named storms, severe thunderstorms and winter storms in the state of Texas, where Germania operates its business.
The reinsurance protection that the Handshake Re Series 2025-1 catastrophe bond will provide, is structured on an indemnity trigger and per-occurrence basis, we are told.
The currently $100 million of Class A notes that are being offered would attach their coverage after losses exceed $100 million and exhaust protection at $200 million, suggesting no room for this cat bond to be upsized unless the covered layer of Germania’s reinsurance tower is widened.
The Class A notes come with an initial attachment probability of 4.23%, an initial expected loss of 2.11% and they are being offered to cat bond investors with initial price guidance for a spread of between 4.75% and 5.25%, we understand.
It’s good to see another first time sponsor coming to market and further accelerating the trend for farm mutuals and other similar mutual insurance entities to access the catastrophe bond market for efficient multi-year catastrophe reinsurance protection.
You can read all about this Handshake Re Ltd. (Series 2025-1) catastrophe bond from first time sponsor Germania Insurance and every other cat bond ever issued in our extensive Artemis Deal Directory.
