American Integrity’s new cat bond sees price rise, reset terms clarified

American Integrity Insurance Company of Florida, Inc. continues to pursue a new catastrophe bond and the $100 million target for the Integrity Re Ltd. (Series 2023-1) issuance hasn’t changed, but we’re told the price guidance has been narrowed and shifted higher, while terms related to the bond reset mechanism have been clarified.

American Integrity returned to the catastrophe bond market seeking $100 million or more in collateralized Florida named storm reinsurance protection with this Integrity Re 2023-1 cat bond just over a fortnight ago.

It will be the insurers sixth in the Integrity Re series of catastrophe bonds, and the company has been leveraging catastrophe bonds to provide it with Florida focused collateralized and multi-year reinsurance protection since  2017.

Details of every cat bond from American Integrity can be found here.

The Integrity Re Series 2023-1 cat bond issuance aims to secure American Integrity $100 million or more in reinsurance protection against named storm events in Florida, on an indemnity and cascading per-occurrence basis, across two Atlantic wind seasons, with a term running from June 1st 2023 to the end of May 2025.

At launch, the single $100 million tranche of Series 2023-1 Class A notes that Integrity Re will issue came with an initial base expected loss of 1.47% and were offered to cat bond investors with spread price guidance of 11% to 12%.

We’re now told that the size of the issuance hasn’t changed, with still $100 million of reinsurance protection sought.

However, the price guidance has been adjusted and it’s moved a little narrower and higher, towards the upper-end of that range, with the notes now being offered to investors with spread guidance ranging from 11.5% to 12%, we’re told.

In recent weeks every cat bond has priced down, or at least within the lower-half of guidance, making this issuance a little less typical of recent market conditions.

However, it is a pure Florida hurricane cat bond and the only one with cascading features in the market, so perhaps this is a good signal for what the Florida market should expect at the reinsurance renewals this year, to face a slightly higher level of pricing than other peril regions.

We’re also told that supplementary information has been sent to investors regarding the reset of this cat bond, with certain limitations around that feature of the cat bond clarified to make clear where the reset bounds lie.

It’s encouraging to see American Integrity and the deal’s arrangers working through investor feedback and questions in this way, while also recognising the pricing limitations in the cat bond market.

You can read all about this new Integrity Re Ltd. (Series 2023-1) catastrophe bond and every cat bond deal in the Artemis Deal Directory.

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