Cincinnati renews cat bond, expands collateralised re coverage with JLT

Cincinnati Insurance Companies has renewed its Skyline Re catastrophe bond as a private placement and expanded its indemnity-based collateralised reinsurance coverage by raising $180 million with the help of JLT Capital Markets (JLTCM).

"Based upon our long-standing partnership with Cincinnati Insurance, we are pleased to collaborate for a third innovative private placement cat bond," said Rick Miller, managing director and co-head of insurance-linked securities (ILS) at JLTCM. "We are excited to not only have strong support from existing investors, but also strong support from new investors as well."

Michael Popkin, managing director and co-head of ILS at JLTCM, added: "Since we started structuring private placement cat bonds with Cincinnati Insurance, the level of acceptance for private placement cat bonds has grown significantly. One of the major advantages of private placement cat bonds is that they allow for more customized risk transfer, which is evident again with Skyline 2017."

"ILS investors are quite comfortable with JLTCM’s private placement platform, as indicated by its growth in issuance size as well as coverage. Indeed, the 2017 program has grown substantially to $180 million from $61.2 million in 2013," said Edward Hochberg, CEO of JLT Re North American and CEO of JLTCM.

"Additionally, coverage has expanded from a constellation of counties to nearly nationwide. It is clear that the potential exists to do much larger private placement cat bonds."

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