Hippo completes $110m catastrophe bond with Mountain Re

Insurtech Hippo has completed a debut US$110m Series 2023-1 catastrophe bond with sponsor Mountain Re

Subsidiary of Hippo, Spinnaker Insurance Company, has announced the sponsorship of a Mountain Re Series 2023-1 catastrophe bond. A 10% upside from its initial $100m transaction target, the $110m cat bond is something Hippo says demonstrates its maturation as a company. 

The transaction

Per the transaction, Spinnaker will enter into a reinsurance contract with Mountain Re, an insurer providing protection coverage against natural catastrophes (nat cats), including thunderstorms, earthquakes and severe temperature conditions. 

Mountain Re will provide Spinnaker with access to capital markets and diversification of risk transfer capacity. 

Rick McCarthon, Hippo President and CEO says: “The successful sponsorship of our debut catastrophe bond demonstrates our maturation as a company. It is the direct result of our geographic diversification efforts and will serve as an integral part of our reinsurance programme. 

“Mountain Re is a multi-year, capital-markets-backed source of reinsurance that provides reinsurance coverage against catastrophic events for Hippo Insurance Service’s homeowners products underwritten by Spinnaker.”

Detailing a deal

Class A notes issued to Spinnaker from Mountain Re came with an initial base expected loss of 0.86%, and a spread of 6.75%. Mountain Re also included an indemnity trigger over a three-year period, with the maturation of Class A notes expected on 5 June 2026. 

The cat bond closed between Mountain Re and Spinnaker was structured by a division of MMC Securities, GG Securities

President of GC Securities, Shiv Kumar, adds: “Current market conditions require creative risk transfer structures like the one provided by Mountain Re. We’re very pleased to support Spinnaker as it delivers innovative insurance solutions and access to the reinsurance market to MGA, programme administration and insurtech companies.”

In April 2023, Hippo took second place in FinTech Magazine’s Top 10 US insurtechs by total funding. Today, it provides coverage for more than 200,000 homes in 39 states from coast to coast.


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