American Integrity Insurance Company has returned to the catastrophe bond market, with an initial target to secure at least $175 million of fully-collateralized US named storm reinsurance for losses across southeastern states, through an Integrity Re III Ltd. (Series 2026-1) issuance, Artemis has learned.
It’s the second from the Integrity Re III Ltd. special purpose insurer that is based in Bermuda, following a $565 million Integrity Re III Ltd. (Series 2025-1) that American Integrity Insurance sponsored one year ago, which became its largest catastrophe bond sponsorship yet.
Details of every cat bond from American Integrity Insurance can be found in our Deal Directory.
With this Series 2026-1 issuance, American Integrity is again looking for multi-layered protection, running a decent way across its main catastrophe reinsurance tower. The issuance features four classes of notes, each occupying different layers and with stated reinsurance and previous cat bonds it has sponsored inuring to them.
We’re told the initial target is to secure at least $175 million in collateralized named storm reinsurance from the capital markets, although the riskiest of the four tranches is currently unsized, which could take the deal size larger.
All four classes of notes are designed to provide American Integrity with multi-year and fully-collateralized named storm reinsurance protection across the states of Florida, Georgia, North Carolina and South Carolina, on an indemnity trigger and per-occurrence basis. In addition, we’re told there is also an element of coverage for watercraft policy losses in the Bahamas as well, which is a novel inclusion.
The reinsurance will run from June 1st for three years from this Integrity Re III 2026-1 cat bond, so aligned with American Integrity’s traditional reinsurance renewal.
As we said, there is stated reinsurance and cat bonds that inure to these tranches with differences for each, hence the attachment points are after that is taken into consideration.
A $75 million Class A tranche of notes that attach at $35 million and exhaust at $165 million, but we’re told are expected to have an effective first attachment at more than $2 billion of losses after inuring layers of the tower. The Class A notes come with an initial attachment probability of 1.61%, an initial base expected loss of 1.38% and are being offered to cat bond investors with price guidance in a range from 8% to 9%.
A $50 million Class B tranche of notes would attach at $100 million and exhaust at $200 million, but we’re told are expected to have an effective first attachment at around $1.07 billion of losses after inuring layers of the tower. The Class B notes come with an initial attachment probability of 3.6%, an initial base expected loss of 3.39% and are being offered to cat bond investors with price guidance in a range from 12% to 13%.
A $50 million Class C tranche of notes would attach at $390 million and exhaust at $590 million, but we’re told are expected to have an effective first attachment at around $870 million of losses after inuring layers of the tower. The Class C notes come with an initial attachment probability of 7.72%, an initial base expected loss of 4.56% and are being offered to cat bond investors with price guidance in a range from 17% to 19%.
The final Class D tranche of notes are unsized and would attach at $200 million and exhaust at $390 million, which we understand to be where an effective first attachment would occur. The Class D notes come with an initial attachment probability of 15.12%, an initial base expected loss of 11.96% and at this stage sources said they have not come with price guidance, but given the expected loss level and the fact this is a riskier lower layer pricing would be anticipated to be considerably higher than the C’s.
Last year’s Integrity Re III 2025-1 catastrophe bond featured a riskier layer of notes that priced to pay a risk interest spread of 25.5%, so American Integrity is known for seeking lower-layer protection from the catastrophe bond market in this way.
Here, with the 2026-1 cat bond, the Class D notes would likely price higher still, given their initial expected loss is more than double that of the highest priced tranche from last year’s cat bond.
This new catastrophe bond for American Integrity will test investor appetite. But in a market where spreads have compressed and tightened while reinsurance softens, higher spread opportunities like these might appeal to investors in the space.
You can read all about this new Integrity Re III Ltd. (Series 2026-1) catastrophe bond and every cat bond deal in the Artemis Deal Directory.
