SageSure and SURE Announce Major Catastrophe Bond Issuance
Managing General Underwriter (MGU) SageSure, in collaboration with the policyholder-owned reciprocal exchange, SureChoice Underwriters Reciprocal Exchange (SURE), has successfully completed the issuance of the Gateway Re Series 2025-1 catastrophe bond, raising a substantial US$520 million. This issuance sets a new benchmark, marking the largest in the Gateway Re franchise’s history.
The bond closed at a remarkable 27% above its initial target of US$410 million, and the pricing was approximately 10% lower than the midpoint of the initial guidance. This reflects the strong demand from investors and underscores the market’s confidence in the bond’s offerings.
Having entered the insurance-linked securities (ILS) market in 2022, SageSure has rapidly established itself as a leading primary catastrophe bond sponsor in the United States. With the completion of the 2025-1 transaction, the cumulative notional limit secured through the SageSure-supported Gateway Re series exceeds US$1.7 billion.
Innovative Structuring in Coverage
The 2025-1 issuance is groundbreaking as it is the first in the Gateway Re series to offer coverage structured with a first-event limit across the initial three tranches and a second-event limit across the final two tranches. This innovative approach enhances the bond’s appeal and effectiveness in risk management.
Swiss Re Capital Markets played a pivotal role as the sole structuring agent and bookrunner for the transaction. Jean-Louis Monnier, CEO of Swiss Re Capital Markets, commented that the transaction’s pricing and size are a testament to the strength of SageSure’s ILS franchise.
SageSure’s president and CEO, Terrence McLean (pictured above), expressed pride in supporting their carrier partners in securing the Gateway Re franchise’s largest catastrophe bond to date.
Previous Success and Market Growth
Earlier in March 2024, SageSure and SURE closed the Gateway Re 2024-1 catastrophe bond at US$250 million, a significant 67% increase from the midpoint of its initial target range of US$100 to US$200 million. This issuance offered named storm reinsurance protection for both SURE and SageSure’s affiliated reciprocal exchange, Elevate, across multiple states.
In April 2024, they further secured the Gateway Re 2024-2 second and subsequent event catastrophe bond at US$130 million, with pricing 75 basis points tighter than the midpoint of the initial price guidance.
The broader catastrophe bond market saw substantial growth in 2024, with issuance reaching a historic high of nearly US$17.7 billion, marking a 7% increase over the previous year. This growth has expanded the total market size to approximately US$49.3 billion, driven by insurers seeking alternative risk transfer solutions amid increasing climate-related risks.
Remarkably, the outstanding catastrophe bond market size surpassed US$50 billion for the first time, reflecting the market’s resilience and growing attractiveness to investors.
