Having recently secured its biggest catastrophe bond to-date, Fidelis’ new $375 million Herbie Re Ltd. (Series 2024-2) issuance enhances its reinsurance arrangements and supports the managing general underwriter (MGU) Fidelis Partnership to capitalise on catastrophe-exposed business opportunities, executives have said.

As we’ve been reporting since November, Fidelis Insurance Group has been back in the catastrophe bond market which resulted in the company securing the sixth and also largest in its series of Herbie Re catastrophe bond transactions.

Artemis revealed back on December 18th that having achieved strong price execution for the new Herbie Re 2024-2 cat bond, Fidelis secured $375 million of multi-peril annual aggregate retrocessional reinsurance protection from its latest venture into the catastrophe bond market.

The Herbie Re cat bonds are just one capital markets tool that Fidelis uses to support the capacity needs of the Bermuda-based managing general underwriter (MGU) Fidelis Partnership.

Recall that Fidelis separated its balance-sheet insurance business and the MGU back in 2022, since when the pair are separately owned and managed but closely work to support each others risk, capital and business needs.

The separation was said at the time to provide capital flexibility, which is evident in the broad range of capital tools the pair utilise, to support the expanding underwriting capacity needs of the Fidelis brands.

Now having secured its latest and largest Herbie Re catastrophe bond, which you can read full details on in the Artemis Deal Directory and in our articles on the issuance journey, Fidelis executives have explained how the cat bond provides supportive capacity to help the MGU seize attractive underwriting opportunities.

The executives also explained that catastrophe bonds are just one form of capital tool that Fidelis has access to.

Ian Houston, Fidelis Insurance Group Chief Underwriting Officer, commented, “We are pleased to announce that Fidelis Insurance Group has completed the most recent issuance of the Herbie Re Catastrophe Bond program. These bonds continue to be a crucial part of our strategic capital management and risk mitigation plan.

“Enhancing our overall reinsurance strategy, which includes quota share, excess of loss, and industry loss warranties (ILWs), the Herbie Re Catastrophe Bonds support our strategic underwriting partner The Fidelis Partnership.”

We had been told that Fidelis was in the market for other forms of protection at the same time as the Herbie Re catastrophe bond, so it is testament to the strong execution being seen in the cat bond market that the company opted to make this new cat bond deal its largest yet and secured it at reduced pricing.

Richard Coulson, Deputy Group Chief Underwriting Officer at The Fidelis Partnership, further explained, “Building on the current Herbie Re Catastrophe Bond program, we are pleased to have executed the placement alongside Ian Houston and the Fidelis Insurance Group team to bring the latest series to market.

“This tranche of coverage represents the newest tool employed by Fidelis Insurance Group, supporting The Fidelis Partnership as we continue to capitalize on opportunities across catastrophe-exposed lines of business in 2025 and beyond.”

To remind you, the Herbie Re 2024-2 cat bond deal features three tranches of notes that togetehr provide Fidelis with a $375 million multi-year source of annual aggregate and territory weighted PCS industry loss index triggered protection, covering losses from major events caused by the perils of US named storm and US earthquake risks, including DC, Puerto Rico and the US Virgin Islands.

$300 million of coverage from the Class A and B notes provide four years of protection, while the final $75 million Class C tranche that sits much lower-down (being riskier) provide two years of aggregate retro.

With now $1.005 billion of catastrophe bond backed protection from still five Herbie Re cat bond issuances in-force, Fidelis now sits at twelfth in our catastrophe bond sponsor leaderboard.

It’s clear that Fidelis is utilising different risk capital sources and appetites to optimise its protection and use of capital and capacity, feeding its MGU relationship to enable the Fidelis Partnership to capitalise on opportunities in the still attractively priced market for catastrophe-exposed property coverage.

Read all about this Herbie Re Ltd. (Series 2024-2)  catastrophe bond comes to market and you can read about this and every other cat bond deal in the Artemis Deal Directory.