SageSure and Auros Capitalize on Investor Demand with $175 Million Cat Bond Issuance
SageSure, the largest residential property managing general underwriter (MGU) in the United States focused on catastrophe-exposed markets, has announced the successful completion of a new catastrophe bond transaction in collaboration with Auros Reciprocal Insurance Exchange, a policyholder-owned property insurance provider. The transaction, known as the Gateway Re Ltd. Series 2026-2 catastrophe bond, secured $175 million in capital and represents another milestone in SageSure’s expanding presence in the insurance-linked securities (ILS) market.
The new issuance builds on the company’s earlier capital markets activity and further strengthens its position among the leading catastrophe bond sponsors worldwide. The Gateway Re Series 2026-2 deal follows closely after the previously completed Gateway Re 2026-1 transaction, which raised $670 million. Together, these deals have helped SageSure reach approximately $3 billion in outstanding notional limit across its catastrophe bond programs, positioning the company as the third-largest sponsor in the global catastrophe bond market.
Catastrophe bonds are financial instruments that allow insurance and reinsurance companies to transfer disaster-related risk to investors in capital markets. Investors receive attractive returns in exchange for assuming the possibility of losses if specific catastrophic events occur. These instruments have become an increasingly important tool for insurers seeking long-term and diversified sources of risk protection, particularly in regions that face frequent natural disasters.
The Gateway Re 2026-2 transaction achieved favorable pricing terms during its issuance process, reflecting strong demand from investors. Pricing for the Class A notes was finalized below the initial guidance range, while the Class B notes were priced within the originally proposed range. This outcome indicates strong investor appetite for the transaction and confidence in the underlying risk structure and underwriting performance supporting the bond.
Market observers view the successful pricing as evidence of the growing maturity of SageSure’s relationship with institutional investors in the ILS market. Over time, the company has developed a reputation for transparency, disciplined underwriting, and strong performance, all of which help attract capital market participants seeking exposure to diversified catastrophe risk.
The transaction also reflects SageSure’s broader strategy of expanding coverage across multiple types of natural disasters, including what are often referred to as secondary perils. These include risks such as wildfires and severe thunderstorms, which historically have been more challenging to securitize due to higher perceived volatility. By incorporating these risks into its reinsurance structure, SageSure aims to build a more comprehensive and resilient risk transfer framework.
Terrence McLean, President and Chief Executive Officer of SageSure, said the success of the issuance highlights the strength of the company’s underwriting platform and the trust it has established with investors. According to McLean, achieving favorable pricing in the current market environment enables the company to maintain competitive protection costs while securing multi-year capital capacity to support policyholders.
McLean emphasized that this capacity is particularly important in coastal and catastrophe-prone regions, where insurers must be prepared for unpredictable weather events and increasing climate-related risks. By securing long-term reinsurance protection through catastrophe bonds, SageSure can continue to support homeowners in markets where traditional insurance capacity may be limited.
The Gateway Re 2026-2 bond also supports the risk management needs of Auros and Interboro Insurance Company, which together act as the ceding insurers in the transaction. The bond provides multi-peril indemnity protection for these insurers, transferring a portion of their catastrophe exposure to investors in the capital markets.
Initially, the coverage applies to six key U.S. states that are particularly vulnerable to natural disasters. These include Florida, Louisiana, Mississippi, New York, South Carolina, and Texas. These regions face various natural hazards ranging from hurricanes and severe storms to flooding and wildfire risks.
Despite including multiple secondary perils—risks that typically command higher premiums in the reinsurance market—the Gateway Re transaction was executed efficiently. This demonstrates increasing investor comfort with diversified catastrophe risk structures and suggests that capital markets are becoming more receptive to complex insurance-linked securities.
Travis Lewis, Chief Executive Officer of Auros Risk Management, noted that the strong response from investors reflects the value they place on the diversification and technical expertise offered by the partnership between Auros and SageSure. He explained that the successful bond issuance ensures stable and reliable protection for Auros members through 2029.
For policyholders, the expanded reinsurance coverage helps strengthen the financial resilience of the insurers providing their policies. By transferring catastrophe risk to global capital markets, companies like Auros and Interboro can better manage potential losses from large-scale disasters while maintaining stable coverage options for homeowners.
The protection provided through the Gateway Re 2026-2 catastrophe bond will extend for three years. Coverage is scheduled to begin on July 1, 2026, and will remain in place through 2029. During this period, the bond will help absorb certain losses from qualifying catastrophic events affecting the covered regions.
The transaction was structured and placed by Swiss Re Capital Markets Corporation, which served as the sole structuring agent and bookrunner. Swiss Re Capital Markets plays a key role in connecting insurance companies with investors seeking opportunities in the growing ILS market.
Jean-Louis Monnier, Chief Executive Officer of Swiss Re Capital Markets Corporation, said the firm was pleased to support SageSure, Auros, and Interboro in expanding their capital sources through the latest Gateway Re issuance. He noted that the strong investor response and favorable pricing conditions demonstrate confidence in the companies’ long-term growth strategies and operational track records.
Monnier also highlighted the significance of expanding the range of covered perils within the transaction. By incorporating multiple types of catastrophe risks while still achieving efficient execution, the deal illustrates how the ILS market continues to evolve and deepen in its ability to absorb complex insurance exposures.
Overall, the Gateway Re 2026-2 catastrophe bond represents another step in SageSure’s ongoing strategy to combine traditional insurance expertise with innovative capital markets solutions. As climate-related risks increase and demand for catastrophe protection grows, the use of insurance-linked securities is expected to play an even greater role in helping insurers manage exposure while maintaining financial stability for policyholders.
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