The French insurance group Crédit Agricole is entering the catastrophe bond market for the first time. Taranis Reinsurance DAC 2023 Under the issuance, the company is seeking €150 million or more of investor-backed reinsurance in the capital market against losses due to regional perils.
The cedant of this catastrophe bond is Pacifica, which is a 100% owned entity and which sits under Crédit Agricole Assurance within the group, it appears.
Pacifica is seeking four years of collateralized reinsurance protection against losses due to windstorms and hailstorms affecting France, Monaco and Andorra, until the end of 2027, according to our information.
Taranis Reinsurance DAC, an Irish special purpose company, has been established to issue two tranches of catastrophe bonds which will be sold to investors and the proceeds of which will be used to secure reinsurance arrangements with Crédit Agricole’s Pacifica.
There is a target of at least €150 million in annual global compensation and reinsurance, per event, across the two tranches of catastrophe bonds proposed, we are told.
A tranche of €100 million Class A notes will cover the Pacific for losses from windstorms and hailstorms in the covered area on a per-event basis, while a €50 million tranche Class B will only cover losses due to windstorms and on an aggregate and secondary annual basis. event basis, we understand.
Class A tickets per occurrence would attach €300 million in losses to Pacifica, covering a layer of up to €600 million, giving them an initial seizure probability of 5.77%, a initial expected loss of 3.53% and they are offered for cat bond investors with spread price forecasts of between 7% and 7.5%.
Class B bonds, accumulation and second event, would be attached to 90 million euros of losses, covering a tranche of up to 180 million euros, but would have a relatively high excess of 75 million euros, which would give them an initial foreclosure probability of 2.45%, an expected first loss of 1.5% and they are offered to cat bond investors with spread price forecasts of between 5% and 5.75%.
It is interesting to see the second global tranche of notes issued, as it is a protection that could prove popular with traditional global reinsurance, which is less readily available today. It is also understandable that the overall tranche does not cover hailstorms, given investors’ aversion to the frequency of secondary risk claims.
It’s good to see another first-time sponsor in the catastrophe bond market this year, as the issuance pipeline continues to build for what now appears to be a very busy few weeks.
We will keep you informed of this news Taranis Reinsurance DAC 2023 catastrophe bond proceeds are released to the market and you can read all about it and over 950 other catastrophe bond deals in the Directory of Artemis offers.