American European Insurance Group partners with ShoreOne Insurance Managers to complete $125 million Cat Bond

BOSTON--(BUSINESS WIRE)--American European Insurance Company (“American European”) and ShoreOne Insurance Managers, Inc. (“ShoreOne”), today announced their successful sponsorship of the Charles River Re Ltd. Series 2024-1 catastrophe bond. The $125 million cat bond is a 25% upsize from the initial $100 million placement target.

As part of the transaction, American European is entering into a reinsurance contract with Charles River Re Ltd. which offers protection against named storms for business written by ShoreOne on its behalf and provides American European with a diversification of risk transfer capacity and access to the capital markets.

“This catastrophe bond is another milestone in ShoreOne’s history and in its partnership with American European,” said Cameron Rhodes, President and Chief Operating Officer of ShoreOne. “This risk transfer protection will strengthen our ability to jointly address the coverage gap for coastal homeowners and the associated flood risk they face.”

“Our catastrophe bond is an essential part of our reinsurance structure and complements a tower backed by industry-leading reinsurers,” said Nachum Stein, CEO of American European. “We are pleased to have successfully sponsored our first catastrophe bond, and done so in partnership with ShoreOne, our valued partner in the coastal homeowner’s market. We are grateful for the strong investor support for our collective mission.”

The Class A Notes issued by Charles River Re Ltd. priced at a spread of 6.75%, with an initial base expected loss of 1.87% and an indemnity trigger over a three-year term with scheduled maturity on May 10th, 2027.

The cat bond successfully closed on April 11, 2024. GC Securities, a division of MMC Securities LLC, is the sole structuring agent and bookrunner.

“We’re proud to have supported American European and ShoreOne’s inaugural catastrophe bond issuance,” said Liam Martens, Senior Vice President of GC Securities. “We are pleased that investors strongly supported this important protection gap initiative and welcomed an MGU and its carrier partner to the catastrophe bond market for the first time in the market’s history.”