Centauri Insurance and Lilypad Insurance announced the completion of Koi Re, a US$30 million catastrophe bond aimed at providing indemnity-based reinsurance protection against named storms in the United States.
The Koi Re transaction offers one year of coverage, allowing Centauri and Lilypad to transfer a portion of their named storm exposure to the capital markets.
Structured as a privately placed 4(a)(2) issuance, the deal is part of an effort to diversify the companies' risk transfer strategies and secure additional reinsurance capacity to support policyholders in the event of a significant storm event.
The US$30 million Koi Re Series 2025-1 Class A notes, structured and placed by Lockton Re Capital Markets, provide per occurrence indemnity reinsurance coverage. The protection spans exposures in Hawaii, Texas, Louisiana, Mississippi, Alabama, Florida, and South Carolina through May 31, 2026.
Koi Re was issued through a Segregated Account of Sailfish Re Ltd., a Bermuda-based Unrestricted Special Purpose Insurer and Segregated Accounts Company. Sailfish Re, an independent platform, is designed to give Lockton Re’s clients access to a broader range of capital.
Ricardo Espino, CEO of Lilypad Insurance, said the completion of the bond introduces a new capital source intended to help protect policyholders and maintain financial resilience.
"By accessing the capital markets via our inaugural catastrophe bond, we have introduced a new capital source to better protect our policyholders and ensure financial resilience against catastrophic events as we continue to grow our operations,” Espino said.
Zach Breslin (pictured above), head of Lockton Re Capital Markets, noted that the transaction demonstrates how insurers can tap the capital markets to manage natural disaster risks.
“Koi Re exemplifies how insurers can effectively access the capital markets to manage exposure to natural disasters and is the latest example of Sailfish Re's utility in delivering bespoke funded solutions to address client needs,” Breslin said.
The Koi Re issuance enters the market at a time when catastrophe bonds are seeing increased investor demand. In the first quarter of 2025, deal sizes in the catastrophe bond market expanded by 34%, with pricing consistently settling nearly 10% below mid-guidance levels.
Despite broader market volatility, catastrophe bonds have maintained their resilience. Yields on these securities rose slightly to 10.93% as of May 30, 2025, underscoring their relative stability.
The global catastrophe bond market has also continued its expansion, reaching an estimated US$10.5 billion in issuance in 2024. This growth reflects insurers’ and investors’ increasing interest in leveraging capital markets for innovative risk management solutions, particularly as the frequency and severity of natural disasters rise.
Centauri Insurance’s financial position provides further context for the company’s risk management strategy. As of late 2024, Centauri reported approximately US$122.77 million in net admitted assets and a policyholders' surplus of US$48.26 million.
During 2023, the company wrote over US$174 million in gross premiums, indicating a solid capital base to complement its use of alternative risk transfer mechanisms such as catastrophe bonds.
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