Slide targets its biggest catastrophe bond yet, with $250m Purple Re 2025-1

Tech-enabled property insurance firm Slide Insurance Company has returned to the catastrophe bond market to sponsor what looks set to be its biggest issuance to-date, with a $250 million target for named storm reinsurance through a Purple Re Ltd. (Series 2025-1) transaction.

Slide Insurance Company sponsored its first catastrophe bond in April 2023, securing $100 million of named storm reinsurance, then a second in July 2023, again securing $100 million of named storm cover, and a third in April 2024 that became its largest to-date by providing $210 million of reinsurance to the company.

Now, we’ve learned that the Bruce Lucas founded and run insurer headquartered in Florida is back again and this time the initial target is to secure $250 million of fully-collateralized and multi-year hurricane reinsurance from the capital markets, so this looks set to be Slide’s largest to-date.

Read about all of Slide’s Purple Re catastrophe bonds in our extensive Deal Directory.

Slide is one of the more rapidly expanding property insurance start-ups in Florida of the last few years and alongside growth in its underwriting portfolio, the company has been building out its catastrophe reinsurance arrangements.

Cat bonds have provided a valuable source of multi-year protection and the company has been growing the capital markets participation in its reinsurance tower over-time.

With this latest cat bond for Slide, the company is again using its Bermuda based special purpose insurer (SPI) Purple Re Ltd.

Purple Re Ltd. will issue two tranches of Series 2025-1 notes that will be offered and sold to cat bond funds and investors, with the proceeds raised set to fully-collateralize reinsurance agreements between the issuer and Slide.

We understand the reinsurance protection from this new Purple Re 2025-1 cat bond will benefit both Slide Insurance Company and its Pawtucket Insurance Company subsidiary.

The $250 million of Series 2025-1 notes on offer will provide Slide with fully-collateralized named storm reinsurance on an indemnity and per-occurrence basis, across the states of Florida and South Carolina to begin.

The term of coverage will run three annual risk periods from June 1st, so with maturity scheduled for early June 2028, we are told.

We’re told the two tranches of notes on offer will occupy a share of the upper-layers of Slide’s reinsurance tower, sitting on top of one another and alongside traditional reinsurance in each case.

Purple Re will issue a currently $125 million Series 2025-1 Class A tranche of notes, that have an initial attachment point of $100 million and cover a share of losses to $357 million. But we’re told that after FHCF cover and stated reinsurance the effective attachment for the Class A notes is at $2.23 billion of losses for a first-event.

The Class A notes have an initial attachment probability of 1.16%, an initial base expected loss of 1.05% and are being offered to cat bond investors with price guidance in a range from 7% to 7.75%, sources said.

Purple Re is also set to issue a currently $125 million tranche of Class B Series 2025-1 notes, that have an initial attachment point of $100 million and cover a share of losses to $350 million. But here we’re told that after the FHCF cover and stated reinsurance is taken into account, the effective attachment for the Class B notes is at $1.98 billion of losses for a first-event and they sit in a reinsurance tower layer directly beneath the Class A notes.

We’re told that the Class B notes come with an initial attachment probability of 1.56%, an initial base expected loss of 1.33% and are being offered to cat bond investors with price guidance in a range from 7.5% to 8.25%.

These two tranches of Series 2025-1 cat bond notes, in sitting at the top of Slide’s reinsurance tower, are remote in risk terms and their respective attachment points are well above the levels of ultimate loss the insurer has faced from major hurricanes in recent years.

As a result, they could prove attractive to cat bond investors and as both have room to upsize if Slide should find pricing conducive to do so, it would not be surprising to see this issuance end up larger than the initially targeted $250 million size.

You can read all about this new Purple Re Ltd. (Series 2025-1) catastrophe bond and over 1,000 other cat bond transactions in our extensive Artemis Deal Directory.