American European partners with ShoreOne to complete $125m cat bond

American European Insurance Company and ShoreOne Insurance Managers, Inc. have revealed their successful sponsorship of the $125 million Charles River Re Ltd. Series 2024-1 catastrophe bond.

American European is entering into a reinsurance contract with Charles River Re Ltd. which offers protection against named storms for business written by ShoreOne on its behalf and provides it with a diversification of risk transfer capacity and access to the capital markets.

The Class A Notes issued by Charles River Re Ltd. are priced at a spread of 6.75%, with an initial base expected loss of 1.87% and an indemnity trigger over a three-year term with scheduled maturity on May 10th, 2027.

The catastrophe bond successfully closed on April 11, 2024, with GC Securities, a division of MMC Securities LLC, operating as the sole structuring agent and bookrunner.

Cameron Rhodes, President and Chief Operating Officer of ShoreOne, commented, “This catastrophe bond is another milestone in ShoreOne’s history and in its partnership with American European.

“This risk transfer protection will strengthen our ability to jointly address the coverage gap for coastal homeowners and the associated flood risk they face.”

Nachum Stein, CEO of American European, added, “Our catastrophe bond is an essential part of our reinsurance structure and complements a tower backed by industry-leading reinsurers.

“We are pleased to have successfully sponsored our first catastrophe bond, and done so in partnership with ShoreOne, our valued partner in the coastal homeowner’s market. We are grateful for the strong investor support for our collective mission.”

Liam Martens, Senior Vice President of GC Securities, said, “We’re proud to have supported American European and ShoreOne’s inaugural catastrophe bond issuance.

“We are pleased that investors strongly supported this important protection gap initiative and welcomed an MGU and its carrier partner to the catastrophe bond market for the first time in the market’s history.”

Read more about this Charles River Re Ltd. (Series 2024-1) catastrophe bond, and all others in the Deal Directory of our sister publication, Artemis.

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