QBE sets sights on $250M Bridge Street Re 2025-1 catastrophe bond.

QBE Insurance Group, the Australia-based global insurance and reinsurance provider, has returned to the catastrophe bond market after a decade-long absence. The company aims to secure $250 million or more in retrocession through the Bridge Street Re Ltd. (Series 2025-1) issuance, according to Artemis.

QBE's last catastrophe bond issuance was in late 2013 when it raised $250 million in U.S. and Australian multi-peril protection through the VenTerra Re Ltd. (Series 2013-1) deal.

This time, QBE is leveraging two recently established Bermuda Class 4 entities—QBE Capital Ltd. and QBE Capital (Global) Ltd.—to enhance efficiency in managing its reinsurance needs and balance-sheet requirements. These entities will act as cedents for the new Bridge Street Re catastrophe bond.

Bridge Street Re Ltd., created as a special purpose insurer (SPI) in Bermuda, plans to issue a single tranche of Series 2025-1 Class A notes. The proceeds from the sale of these notes will collateralize retrocessional reinsurance agreements with the QBE Capital entities.

The Bridge Street Re 2025-1 Class A notes are designed to provide QBE with multi-year protection over a roughly three-year term, from issuance through the end of 2027. The coverage is based on an industry-loss trigger and an annual aggregate structure.

The notes will offer QBE territory-weighted retrocession reinsurance for major industry loss events caused by named storms and earthquakes across the U.S., Puerto Rico, Washington D.C., the U.S. Virgin Islands, and Canada. The franchise deductible for both perils is set at $10 billion per industry-loss event, with PCS serving as the reporting agent.

The $250 million Class A notes come with an initial attachment probability of 2.03% and an expected loss of 1.29%. These are being marketed to cat bond investors with price guidance ranging from 4.25% to 5%.

QBE’s return to the catastrophe bond market highlights the growing recognition among large insurers and reinsurers of the value of diversifying reinsurance sources through capital markets. It also underscores the effectiveness of the cat bond market in providing capacity for well-structured aggregate protection.

You can explore this transaction and other catastrophe bonds in the Artemis Deal Directory.