The newly-established Bermuda special purpose insurer, Hestia Re Ltd, has entered into a multiyear reinsurance arrangement with Kin Interinsurance Network, the reciprocal insurance carrier for Kin Insurance.

The parties have successfully closed a $175-million private placement catastrophe bond transaction, which will provide the Kin Interinsurance Network with indemnity-based coverage for large hurricanes and other named storms affecting Florida.

Angel Conlin, chief insurance officer at Kin, commented: “Our first catastrophe bond will be an integral part of Kin’s broader reinsurance programme which protects our company.

“The transaction also highlights our strong support from capital market investors, continued backing by industry-leading reinsurers, and ability to bring more capital directly into our growing business, which will be important as we explore subsequent alternative risk transfer options in the future.”

Although the transaction was announced with an initial target of $100 million, the catastrophe bond was upsized to $175 million based on the support received from investors.

Swiss Re Capital Markets and TigerRisk Capital Markets and Advisory acted as joint structuring agents and joint bookrunners on the transaction.

“Swiss Re Capital Markets is proud to have advised Kin in structuring and placing its first-ever catastrophe bond,” said Andras Bohm, head ILS structuring for the Americas of Swiss Re Capital Markets.

“The success of the transaction and upsize to $175 million are a testament to ILS investors' willingness to provide catastrophe risk capacity in support of Kin's fast-growing and technology-driven direct-to-consumer business model.”

Philipp Kusche, global head of ILS and Capital Solutions at TigerRisk, said: “We are delighted to have supported Kin in its inaugural catastrophe bond transaction, which comes on the heels of the establishment of Hestia Re.

“It has been exciting to work with Kin in bringing their unique underwriting approach to the capital markets, and we fully expect the enthusiasm to support this transaction to extend into the June 1 renewal of Kin’s traditional reinsurance programme.”

By leveraging proprietary technology, Kin said, it delivers fully digital homeowners insurance with an elegant user experience, accurate pricing, and fast, high-quality claims service.

Kin offers homeowners, landlord, condo, and mobile home insurance through the Kin Interinsurance Network, a reciprocal exchange owned by its customers who share in the underwriting profit.