Vermont Mutual Insurance Company Upsizes Catastrophe Bond Issuance to $250 Million
Vermont Mutual Insurance Company has announced an increase in its new Baldwin Re Ltd. (Series 2025-1) catastrophe bond issuance target to a potential $250 million, thereby aiming to secure significant reinsurance protection against losses in northeastern U.S. states. Initially set at $200 million, this issuance represents the insurer’s largest catastrophe bond to date.
The company, which returned to the catastrophe bond market in May for the first time since 2023, aims to cover various perils including named storms, earthquakes, severe weather, and fire. The covered region encompasses Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.
Vermont Mutual’s journey in the cat bond market began in 2021 with its inaugural $150 million bond, designed to provide multi-peril reinsurance. As that bond matures this June, the current issuance appears to be both a renewal and an upsizing of its reinsurance coverage. In 2023, the company issued a $100 million bond, which remains active until 2027.
For the Baldwin Re Ltd. (Series 2025-1) deal, a Bermuda-based special-purpose insurer will issue Class A notes, with proceeds used to back a reinsurance agreement for Vermont Mutual and its affiliates Northern Security Insurance Company, Inc. and Granite Insurance Company.
Notably, the newly upsized bond has an initial attachment probability of 1.453% and an expected loss of 1.1%. Its pricing has been guided towards a spread of 3.75%, the lower end of initial estimates.
As Vermont Mutual Insurance moves forward with this significant issuance, updates will remain forthcoming on its pricing and overall market performance.
————————————————————————
Note: The image is for illustrative purposes only and is not the original image associated with the presented article. Due to copyright reasons, we are unable to use the original images. However, you can still enjoy the accurate and up-to-date content and information provided.
————————————————————————
