GC Securities, a division of MMC Securities LLC, a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of a single class of the Series 2016-1 Notes with principal amount of USD75,000,000 through the newly formed special purpose insurer domiciled in Bermuda, First Coast Re Ltd., to ultimately benefit Security First Insurance Company (“SFIC”) in SFIC’s first use of catastrophe bond-based reinsurance.
The Notes provide per occurrence indemnity triggered protection from Named Storms and Severe Thunderstorms (including tornado and hail events) affecting the State of Florida. They are structured with a “top & drop” cascading feature where the attachment level adjusts through an annual period as covered events occur and erode Security First Insurance Company’s other reinsurance that inures to the benefit of the cat bond.
The Notes have an annual attachment probability of 1.37 percent and annual expected loss of 1.31 percent based on AIR Worldwide’s Hurricane Model for the U.S. (warm sea surface temperature conditioned sensitivity catalog) and Severe Thunderstorm Model for the United States. GC Securities served as joint structuring agent and joint bookrunner.
June 7, 2019
Permitted Investments Yield (initially based on UST MMFs) + 4.00% per annum
Cory Anger, Global Head of ILS Structuring, GC Securities, noted, “We are honored to have supported Security First Insurance’s initial foray into the cat bond space. The cascading per occurrence protection was designed with significant flexibility to respond to the covered events of Named Storms and Severe Thunderstorms from a severity and frequency perspective through the cascading feature within an annual risk period as well as through a variable annual reset to adjust the position of such protection layer in future years.”
Chi Hum, Global Head of ILS Distribution, GC Securities, stated, “The strong support of more than 20 participating investors for the Series 2016-1 Notes demonstrates the investor base’s respect for Security First Insurance’s management and approach to underwriting and claims handling in Florida.”
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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.