American Coastal returns to cat bond market with $25.5M Florida storm deal
What's the deal? American Coastal Insurance CompanyDealroom has a profile for this one. Try Dealroom → has returned to the catastrophe bond market with a $25.5 million issuance through its Bermuda-based special purpose insurer, Armor Re II LtdDealroom has a profile for this one. Try Dealroom →. The Series 2026-2 deal, a single tranche of Class A notes, covers Florida named storm risk on an indemnity basis.
The details: The notes are structured as zero-coupon and run from August 1, 2026 to the end of May 2027, with maturity in early June — roughly one year of protection spanning the US hurricane season.
Why now? The deal follows a $25.5 million reduction in American Coastal's first-event retention after it bought additional reinsurance incepting August 1. Executives said the buy-down lowered the retention for Florida hurricanes from $49 million to $23.5 million.
What's the endgame? Artemis believes the notes securitize that retention buy-down arrangement, likely attaching at $23.5 million of losses and exhausting at $49 million on a per-occurrence basis. The proceeds collateralize a reinsurance agreement between the insurer and Armor Re II.
American Coastal's chief executive officer said the buy-down reinsurance cost roughly $8.4 million, implying a rate-on-line approaching 33%.
The signal: This marks the eighth cat bond to carry the Armor Re name and the sixth where American Coastal is sole sponsor, underscoring how Florida-focused insurers increasingly turn to capital markets for fully collateralised reinsurance.
Read more: artemis.bm
Image credit: NOAASatellites
