California based utility the Los Angeles Department of Water and Power (LADWP) has finally secured $30 million of wildfire insurance cover from its second catastrophe bond issue, after the Power Protective Re Ltd. (Series 2021-1) deal was priced at the raised coupon level.
The eventual and successful pricing of this second Power Protective Re cat bond demonstrates that wildfire insurance, or reinsurance, capacity is available from the insurance-linked securities (ILS) market.
But the process to get to this pricing shows that this is not at any cost and ILS funds and investors are demanding higher returns for the California wildfire peril after recent losses from it.
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