Deal is the latest from the US residual market to tap the capital markets

Hurricane Sandy

Louisiana’s state catastrophe insurer, LA Citizens, has brought a new cat bond – Pelican Re – to market as part of its 2013 reinsurance renewal.

It is understood the cat bond, which is being brought to market by Aon Benfield Securities, will look to secure at least $100m of cover from the capital markets for Louisiana windstorm risks.

LA Citizens is the latest residual market insurer to seek capacity from the capital markets and is coming to market at a time when cat bond pricing is very attractive.

Florida Citizens Property Insurance recently returned to market with its Everglades Re cat bond for Florida hurricane perils, following its initial issuance in 2012.

The biggest bond issued to date was the $500m Tar Heel Re bond issued on behalf of North Carolina Joint Underwriters Association and North Carolina Insurance Underwriters Association.

There has been a high level of interest from investors in all cat bonds to date. The insurance-linked securities market has consistently offered more aggressive rates than the traditional reinsurance market, according to an Aon Benfield market briefing.