Florida homeowners' insurer Olympus Insurance has raised $120 million in catastrophe bond protection, marking its entry into the capital markets reinsurance arena through Bermuda-domiciled special purpose vehicle Abacab Re Ltd.
The Series 2026-1 Class A notes, issued under Rule 144A – restricting the offering to qualified institutional buyers – provide three years of fully collateralized named storm coverage on an indemnity, per-occurrence basis, running from June 2026 through May 2029.
The bond sits within a broader reinsurance layer alongside Olympus Insurance's existing traditional and statutory protections.
The transaction launched at $100 million with initial price guidance of 7.75%–8.50%, before investor demand drove a 20% upsize. The deal ultimately priced at 6.25% – approximately 23% below the midpoint of initial guidance.
For context, Florida Peninsula Insurance's Palm Re 2026-1 catastrophe bond, priced in March, came in at 5% against guidance of 5.75%–6.25%, though against an expected loss of 1.37% versus Olympus' 1.66% - reflecting both the difference in risk profiles and Olympus Insurance's status as a first-time issuer.
The deal enters a market with considerable momentum. First-quarter 2026 catastrophe bond issuance reached $6.7 billion, with total outstanding volume at approximately $63.9 billion.
Swiss Re has separately noted that the growing uptake of cat bonds as an efficient multi-year reinsurance source should sustain strong issuance through the year.
Investor appetite has been reinforced by the asset class's recent resilience. Munich Re data shows global insured losses reached approximately $108 billion in 2025, yet catastrophe bond impairments remained minimal.
Fitch Ratings reported that even the Los Angeles wildfires – which generated around $40 billion in insured losses – produced only about $250 million in cat bond impairments. In a January research note, Fitch said it expects continued growth in the alternative reinsurance capital market in 2026, citing robust investor supply.
Olympus Insurance's reinsurance structure pushes well past the minimum standard set by Demotech, the ratings agency whose requirements govern most Florida carriers.
Demotech mandates first-event coverage to a 1-in-130-year return period – a threshold carrying a roughly 0.8% probability of being exceeded in any given year. Olympus said its modeled results indicate no storm in Florida's recorded history, including the 1926 Great Miami Hurricane, would exhaust its coverage.
Sideways protection has also been extended beyond rating agency requirements to account for potential third and fourth events.
CEO Tim Stroble (pictured above) said the transaction "further diversifies our sources of capital, while continuing to strengthen our ability to withstand extreme events."
Favorable market conditions – reinsurers have posted strong results for three consecutive years – are being used to expand protection and pass savings to policyholders, with rate reductions beginning in February.
