Managing general underwriter (MGU) SageSure and policyholder-owned reciprocal exchange SureChoice Underwriters Reciprocal Exchange (SURE) have announced the closing of the Gateway Re Series 2025-1 catastrophe bond at US$520 million.
SageSure said that this transaction marks the largest issuance in the Gateway Re franchise to date.
The bond closed at approximately 27% above its initial target of US$410 million, with pricing about 10% lower than the midpoint of the initial guidance, indicating notable demand from investors.
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SageSure first entered the insurance-linked securities (ILS) market in 2022 and has since become one of the leading primary catastrophe bond sponsors in the United States. The completion of the 2025-1 transaction brings the cumulative notional limit secured through the SageSure-supported Gateway Re series to over US$1.7 billion.
The 2025-1 issuance is the first in the Gateway Re series to structure coverage with first-event limit across the initial three tranches and second-event limit across the final two tranches.
Swiss Re Capital Markets served as the sole structuring agent and bookrunner for the transaction. Jean-Louis Monnier, CEO of Swiss Re Capital Markets, said the transaction’s pricing and size reflect the strength of SageSure’s ILS franchise.
SageSure’s president and CEO, Terrence McLean (pictured above), said the company supports its carrier partners in securing the Gateway Re franchise’s largest catastrophe bond to date.
Earlier in March 2024, SageSure and SURE closed the Gateway Re 2024-1 cat bond at US$250 million, a 67% increase from the midpoint of its initial US$100 to US$200 million target range. This issuance provided named storm reinsurance protection for both SURE and SageSure’s affiliated reciprocal exchange, Elevate, across several states.
In April 2024, they further secured the Gateway Re 2024-2 second and subsequent event cat bond at US$130 million, with pricing 75 basis points tighter than the midpoint of the initial price guidance.
The broader cat bond market experienced significant growth in 2024. Issuance reached a new high of almost US$17.7 billion, a 7% increase from the previous year, bringing the total market size to approximately US$49.3 billion. This growth was driven by insurers seeking alternative risk transfer solutions amid escalating risks from climate-related disasters.
Notably, the outstanding cat bond market size surpassed US$50 billion for the first time, reflecting the market's resilience and attractiveness to investors.
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