Hippo Completes $110m Debut Catastrophe Bond
Successful sponsorship of the Mountain Re Ltd. Series 2023-1 catastrophe bond has been announced by Spinnaker Insurance Company, a wholly owned subsidiary of Hippo Holdings Inc.
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As part of the deal, Spinnaker will enter into a reinsurance contract with Mountain Re that will cover risks associated with natural disasters like earthquakes, tornadoes, floods, and hurricanes.
Spinnaker’s risk transfer capabilities and access to financial markets are both bolstered by the deal.
The $110 million cat bond is an increase of 10% from the original $100 million transaction goal, as reported by Hippo.
Hippo Completes $110m Debut Catastrophe Bond
Hippo President and CEO Rick McCathron, commented, “The successful sponsorship of our debut catastrophe bond demonstrates our maturation as a company.
“It is the direct result of our geographic diversification efforts and will serve as an integral part of our reinsurance program.
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“Mountain Re is a multi-year, capital-markets-backed source of reinsurance that provides reinsurance coverage against catastrophic events for Hippo Insurance Service’s homeowners products underwritten by Spinnaker.”
The Class A Notes issued by Mountain Re Ltd., according to Hippo, had a spread of 6.75%, an initial base expected loss of 0.86%, an indemnity trigger, and a maturity date of June 5th, 2026.
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On May 31st, 2023, the cat bond was successfully terminated. Only GC Securities, a subsidiary of MMC Securities LLC, participated as a book-runner and structured the deal.
Hippo Completes $110m Debut Catastrophe Bond
Shiv Kumar, President of GC Securities, said, “Current market conditions require creative risk transfer structures like the one provided by Mountain Re.
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“We’re very pleased to support Spinnaker as it delivers innovative insurance solutions and access to the reinsurance market to MGA, program administration and insurtech companies.”
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