Hannover Re has returned to the catastrophe bond market with Acorn Re Ltd. (Series 2026-1), the seventh deal in its Acorn Re parametric earthquake programme, Artemis reported on 9 October. The issuance targets $200m of protection through a single class of notes from Acorn Re, a Bermuda special purpose insurer.
Hannover Re acts as the ceding reinsurer. The cover protects Oak Tree Assurance, a Vermont-based workers' compensation captive of the Kaiser Permanente health plans, and Hannover Re can also use it for other clients with exposure in the covered area. Payouts depend on the magnitude and location of an earthquake, on a sliding scale with a minimum payout of 25%.
The covered zone is the US West Coast, mainly California, together with Oregon, Washington, Nevada, Utah, Arizona, British Columbia, Baja California, Sonora and some offshore Pacific areas. Southern California accounts for about 72% of expected loss. The term is three years, with annual risk periods from 1 November 2026 to the end of October 2029.
Initial terms show an attachment probability of 0.96%, an expected loss of 0.78% and spread guidance of 2% to 2.25%, or about 2.72 times expected loss at the midpoint, against 2.45 times for the 2025-1 notes. Artemis called the higher multiple interesting in today's softer reinsurance market, and noted that because investors have minimum return targets, bonds with very low spreads often price at slightly higher multiples. The $150m Acorn Re 2023-1 bond matures this November, and Artemis said the larger target suggests the cedents want to keep growing the programme.
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Artemis ↗News publisher · 9 Oct 2026
This is an original brief based on the linked publication. Company statements and forecasts are attributed to their source.
