Kin closes first $175m multi-year cat bond

Kin Insurance has announced that the Kin Interinsurance Network, its reciprocal insurance carrier, has successfully closed a $175 million private placement catastrophe bond transaction.

Kin entered into a multi-year reinsurance arrangement with Hestia Re, a newly established special purpose insurer in Bermuda, which will provide the Kin Interinsurance Network with indemnity-based coverage for large hurricanes and other named storms affecting the State of Florida.

“Our first catastrophe bond will be an integral part of Kin’s broader reinsurance programme which protects our company,” said Angel Conlin, chief insurance officer at Kin.

“The transaction also highlights our strong support from capital market investors, continued backing by industry-leading reinsurers, and ability to bring more capital directly into our growing business, which will be important as we explore subsequent alternative risk transfer options in the future.”

Although the transaction was announced with an initial target of $100 million, the catastrophe bond was upsized to $175 million based on the support received from investors.

Swiss Re Capital Markets and TigerRisk Capital Markets & Advisory acted as joint structuring agents and joint bookrunners on the transaction.

Andras Bohm, head ILS structuring for the Americas of Swiss Re Capital Markets, said: “The success of the transaction and upsize to $175 million are a testament to ILS investors' willingness to provide catastrophe risk capacity in support of Kin's fast-growing and technology-driven direct-to-consumer business model.”

Philipp Kusche, global head of ILS and capital solutions at TigerRisk Capital Markets & Advisory, added: “It has been exciting to work with Kin in bringing their unique underwriting approach to the capital markets, and we fully expect the enthusiasm to support this transaction to extend into the June 1 renewal of Kin’s traditional reinsurance programme.”