Fidelis Insurance Group Sponsors New Herbie Re Ltd. Catastrophe Bond
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Key Terms
catastrophe bondfinancial
A catastrophe bond is a type of bond sold by insurers or reinsurers that lets investors take on the financial risk of a specified natural disaster in exchange for higher interest payments; if the disaster happens, investors can lose part or all of their initial investment to cover insurer losses. It matters to investors because these bonds can pay attractive returns and behave differently from stocks and bonds, offering portfolio diversification—but they carry the real chance of a sudden, large loss, like collecting premium for an insurance policy that pays out if a house in a risky neighborhood burns down.
principal-at-risk variable rate notesfinancial
Principal-at-risk variable rate notes are debt securities that pay interest at a changing rate but can reduce or wipe out some or all of the original amount invested (the principal) under specified conditions. Think of them like a loan that pays a variable coupon but comes with a built-in possibility that you won’t get all your money back if certain triggers occur; investors need to weigh potentially higher yields against the real chance of capital loss and issuer or market-related triggers that affect repayment.
A collateralized retrocessional reinsurance arrangement is when a reinsurer buys reinsurance for the risks it has already taken on and secures that protection with cash or assets set aside as collateral. Think of it as a safety deposit that a backup insurer puts in a locked box to guarantee it can pay claims if the primary reinsurer can’t. For investors, this affects how much risk and capital a company truly keeps on its balance sheet and how exposed it is to counterparties and liquidity strain.
quota share agreementsfinancial
A quota share agreement is a contract where an insurance company hands a fixed percentage of its premiums and corresponding claims to another insurer (a reinsurer), so both share profits and losses proportionally. Investors should care because it changes the first insurer’s risk exposure, reported earnings and capital needs—like slicing a pie and giving one always-fixed share to a partner, which can stabilize results but also reduce potential upside.
excess of loss treatiesfinancial
Excess of loss treaties are reinsurance agreements where a reinsurer pays for claims only after a primary insurer’s own loss amount (the retention) is exhausted, up to a pre-set limit—think of it as an umbrella that only opens once a certain level of rain has fallen. Investors watch these treaties because they lower an insurer’s exposure to large, unexpected losses and therefore can stabilize earnings and capital needs, though they come at a cost (reinsurance premiums) that affects profitability.
industry loss warrantiesfinancial
Industry loss warranties are contracts that pay out when total losses across an entire insurance industry from a specific event (like a hurricane or earthquake) exceed a preset threshold. For investors, they matter because they shift large, unpredictable catastrophe costs away from an insurer’s own books—like a safety net that springs only when neighborhood-wide damage passes a certain point—affecting an insurer’s capital, earnings volatility and risk profile.
PEMBROKE, Bermuda--(BUSINESS WIRE)--
Fidelis Insurance Holdings Limited (NYSE:FIHL) (“Fidelis Insurance Group”), a global specialty insurer, announced today that Fidelis Insurance Bermuda Limited (“FIBL”) has successfully placed a new catastrophe bond through the issuance of Series 2026-1 Class A Principal-at-Risk Variable Rate Notes (the “Series 2026-1 Notes”), by the Herbie Re Ltd. program (“Herbie Re”).
This is the eighth series of notes issued by Herbie Re and will provide Fidelis Insurance Group with annual aggregate, industry-loss triggered protection against losses from earthquakes affecting the United States and District of Columbia. The $75 million in Herbie Re Series 2026-1 Notes will provide Fidelis Insurance Group with a source of annual aggregate collateralized retrocessional reinsurance protection over an almost four year term through the end of 2029.
Ian Houston, Fidelis Insurance Group Chief Underwriting Officer, said “Building on the success of our Herbie Re Catastrophe Bond program, we are pleased to announce the latest issuance for Fidelis Insurance Group. Catastrophe bonds remain a crucial element of our comprehensive capital management and external protection framework, delivering substantial capital efficiency and robust protection against severe events. This new issuance extends coverage across our entire portfolio, including business written through The Fidelis Partnership and New Underwriting Partnerships, further strengthening our reinsurance protections, which also includes quota share agreements, excess of loss treaties, and industry loss warranties."
The catastrophe bond priced on January 16, 2026, and closed on January 22, 2026. Aon Securities LLC acted as Sole Structuring Agent and Sole Bookrunner for the deal. Willkie Farr & Gallagher (UK) LLP acted as counsel for Fidelis Insurance Group and Herbie Re.
About Fidelis Insurance Group
Fidelis Insurance Group is a global specialty insurance and reinsurance company focused on creating value through strategic capital allocation, expert risk selection, and a network of long-term underwriting partnerships.
We have built a strong foundation for scale and profitable growth, underpinned by our disciplined approach to risk selection and our financial strength, which is reflected in our insurer financial strength ratings of A from AM Best, A- from S&P and A3 from Moody’s. Our network of underwriting partners and highly diversified portfolio enables us to execute our strategy of proactively navigating market cycles, offering innovative and tailored solutions, capitalizing on favorable risk-reward opportunities, and producing superior returns for shareholders.
For additional information about Fidelis Insurance Group, our people, and our products please visit our website at www.FidelisInsurance.com.
Certain statements contained in this press release, in interviews and in related posts, constitute “forward-looking statements,” and are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and are subject to known and unknown risks and uncertainties, many of which are beyond management’s control. These statements involve risks and uncertainties that may cause Fidelis’ actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to rely on forward-looking statements, and, except as required by law, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, Fidelis assumes no obligation and does not intend to update or revise these forward-looking statements after the date of this press release, whether as a result of new information, future events, or otherwise.
