SafePoint Insurance Company is once again engaging with the catastrophe bond market, aiming to acquire $250 million in multi-year reinsurance protection against named storms. This capital will be sourced from investors through the issuance of a Nature Coast Re Ltd. (Series 2026-2) cat bond, as recently disclosed.
SafePoint Insurance operates an extensive insurance platform and is demonstrating significant growth by seeking named storm reinsurance that spans the widest geographical area of any of its previous catastrophe bonds. The company had a busy year in 2025, sponsoring two catastrophe bonds: a $200 million deal via Nature Coast Re 2025-1 in January for annual aggregate and industry-loss trigger-based reinsurance, followed by an additional $150 million in indemnity-based reinsurance with a Nature Coast Re 2025-2 issuance in April.
Continuing its proactive approach in 2026, SafePoint secured $250 million in indemnity named storm reinsurance through the Nature Coast Re Ltd. (Series 2026-1) issuance earlier this year in February. This latest endeavor will be the company's sixth catastrophe bond under the Nature Coast Re special purpose vehicle, and its tenth overall, underscoring a consistent reliance on the capital markets for risk transfer.
The Nature Coast Re Ltd. offering for investors consists of two tranches of Series 2026-2 catastrophe bond notes. These notes will be sold to support the underlying reinsurance agreements fully. Consistent with previous issuances, these agreements will protect SafePoint Insurance Company directly, as well as its two reciprocal exchanges: the Louisiana-focused Cajun Underwriters Reciprocal Exchange and the Florida homeowner and business owner-focused Manatee Insurance Exchange.
This new catastrophe bond is notable for its expansive geographical scope, designed to cover losses from named storms across a broader range of US states than any prior SafePoint cat bond. This aligns with the insurer's ongoing expansion into new territories and its strategy to secure more comprehensive reinsurance coverage for its growing portfolio. The covered states include Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas.
Both tranches of notes within this cat bond are structured to provide indemnity-based, per-occurrence trigger protection to SafePoint's underwriting entities. The reinsurance coverage is set to span a four-year period, commencing on December 1st. The Class AA notes, initially set at $100 million, represent the lower-risk layer. They feature an attachment point of $300 million and will absorb losses up to an exhaustion point of $600 million, allowing for potential upsizing beyond the initial target if SafePoint chooses to do so. The Class AA notes come with an initial attachment probability of 0.86% and an expected loss of 0.73%, with price guidance ranging from 4% to 4.75%.
The Class A notes, initially a $150 million tranche, carry a higher risk profile. While also having a $300 million attachment point, they absorb losses up to $1.3 billion, similarly offering room for upsizing. These Class A notes present an initial attachment probability of 3.18% and an expected loss of 1.66%, with price guidance between 6.75% and 7.5%. It's understood that the $300 million attachment point for both tranches is applied after various existing reinsurance arrangements are exhausted. An effective first-event attachment equivalent would be around $600 million for the A notes and $1.6 billion for the AA notes, although this effective attachment could decrease as reinsurance is eroded. Compared to the Nature Coast Re 2026-1 cat bond notes issued in February, which had an initial expected loss of 1.74% and priced at an 8% spread, the current offering's lower spreads reflect the ongoing softening in reinsurance market pricing throughout the year.
