Zurich Re has sold its first “catastrophe bonds”, matching its exposure to US and European windstorms and a California earthquake. The move reflects the desire by Europe’s reinsurance giants to spread their risks further in the face of increasing “locality” risks.

The private market snapped up the $320 million worth of three-year bonds. Once a trigger payout has been reached in the wake of a major disaster, investors will have to pay for some of the losses, and in some extreme cases lose some or all of their principal.

Last month Swiss Re and Tokio Marine and Fire swapped $900 million of their exposures to natural disasters in an attempt to spread their geographic risks. Last year the world insurance industry paid out about $16.5 billion in catastrophe claims.