French insurer Groupama has completed what it describes as the first catastrophe bond on the insurance-linked securities market dedicated to hail risk. The transaction is structured as an aggregate indemnity.
The cat bond, issued through Quercus II Re DAC, totals €120 million and became effective Jan. 1, 2026. It carries a two-year duration and is designed to protect the group's property and motor portfolios against hail-related losses in metropolitan France.
Coverage under the bond is triggered when annual losses exceed €470 million. The transaction received approval from Irish regulatory authorities under the Solvency II regime and is structured as a 144A-type bond issuance.
Aon Securities served as the placement agent and structurer for the deal. According to Groupama, the offering attracted participation from a range of investors that specialize in cat bonds.
The transaction arrives during a period of sustained growth for the ILS market. Cat bond issuance exceeded US$18 billion by the end of the third quarter of 2025, according to Artex Risk. The outstanding ILS market is now estimated at approximately US$56 billion.
Institutional investors have returned to the asset class in force, drawn by returns that remain higher than those seen prior to 2020 and improved deal structures following years of elevated catastrophe activity.
Pierre Lacoste (pictured above), reinsurance director at Groupama Group, said the issuance "demonstrates the group's capacity for innovation and highlights the importance of partnership relations with the ILS market, which enable Groupama to structure effective coverage against Hail losses."
Groupama's move to secure dedicated hail protection through the ILS market signals a shift in how insurers approach coverage for this specific weather peril. The aggregate indemnity structure provides the group with protection once cumulative annual losses breach the specified threshold.
The two-year coverage period extends through the end of 2027, providing the insurer with protection across multiple hail seasons. Terms of the investor pricing were not disclosed.
