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Member, Beacon International Group, Ltd.
NEW YORK—Assurant Inc. is planning to launch a $100 million catastrophe bond to cover a portion of its U.S. hurricane exposure, a market source confirmed Wednesday.
The bond, Ibis Re II Ltd., is being marketed to investors and is expected to close next month.
The deal would represent the second transaction for the New York-based specialty insurer. Last June, Assurant entered the market with a $150 million catastrophe bond, Ibis Re Ltd., to cover losses from U.S. hurricanes over three years.
If successful, it will be the fourth cat bond issued in 2010. Experts have predicted strong activity levels for the second quarter, amid ongoing favorable market conditions for sponsors.
The potential pipeline includes several other transactions that are currently in the early stages of development, market sources said. Additional deals are expected from Boston-based Liberty Mutual Insurance Co. and San Antonio-based USAA Group, market sources said.
Insurers could complete an estimated five to 15 second-quarter transactions, according to the analysis Tuesday by New York-based Guy Carpenter & Co. L.L.C. and GC Securities Ltd., both units of Marsh & McLennan Cos. Inc.
While the second quarter typically is active as the market approaches the June 1 start of the Atlantic hurricane season, the outlook remains “bullish” with expected total issuance for 2010 reaching $3 billion to $5 billion, the report said.