Hamilton Insurance Group, a prominent Bermuda-based insurance and reinsurance holding company, is actively pursuing a significant expansion of its catastrophe bond protection. Informed sources indicate that the company aims to secure at least $250 million through a new Easton Re Ltd. (Series 2027-1) transaction. This initiative seeks to provide collateralized multi-peril retrocessional reinsurance, reinforcing Hamilton's risk management strategy and its engagement with the capital markets.
This latest endeavor builds upon Hamilton's previous successful forays into the catastrophe bond market. The company initially launched its first cat bond in 2020, the $150 million Easton Re Pte. Ltd. based in Singapore. Following this, a second issuance, the Easton Re Ltd. (Series 2024-1), secured $200 million in protection using a Bermuda-based issuer in late 2023. With the 2024-1 bond nearing its maturity in early January 2027, Hamilton's current move to renew and enlarge its cat bond coverage for an additional three years underscores its commitment to leveraging capital markets for robust reinsurance solutions.
The Easton Re Ltd. (Series 2027-1) transaction will feature a single Class A tranche of notes, structured to offer comprehensive retrocessional reinsurance to various entities within the Hamilton group, including Hamilton Re, its Lloyd's managing agency, and Hamilton Select. These notes are designed to cover losses from U.S., DC, Puerto Rico, and Virgin Islands named storms, as well as U.S. and Canada earthquakes, based on a weighted industry loss trigger and per-occurrence basis. The protection is set to span three years, from early 2027 to early 2030, with an initial attachment probability of 4.23% and an expected loss of 2.66%. The pricing guidance for investors ranges from 4.75% to 5.25%, reflecting a multiple-at-market of 1.88 times the expected loss at the midpoint. This new offering represents Hamilton's largest catastrophe bond sponsorship to date, signaling a continued strategic alignment with capital markets for enhanced risk transfer.
Hamilton's consistent utilization and expansion of catastrophe bond coverage exemplify a forward-thinking approach to managing complex risks. By actively engaging with institutional investors through initiatives like Easton Re, the company not only strengthens its financial resilience against catastrophic events but also contributes to the broader development and stability of the insurance-linked securities market. This commitment ensures a robust framework for protection and fosters confidence among stakeholders, reflecting a positive outlook on leveraging innovative financial instruments for long-term security and growth.
