Swiss Re’s cat bond with a difference
Swiss Re has established a $US100 million ($126 million) catastrophe bond to reinsure Ace American Insurance against US hurricane and earthquake risks for three years.
The bond was financed with insurance-linked securities issued through Calabash Re III Ltd, a company based in the Cayman Islands.
Risk Management Solutions (RMS), the company that provided the risk modelling analysis, has hailed the bond as the first to provide investors with a modelled event loss table – information that is standard in reinsurance arrangements.
Swiss Re’s modified industry trigger transaction uses insured industry loss estimates provided by US company Property Claims Services that are adjusted by the modelled share of industry loss based on the applicable portfolios.
The reinsurer is also claiming a market first with the type of collateral chosen for the deal – floating rate notes issued by the AAA-rated International Bank for Reconstruction and Development, part of the World Bank.
The bond was financed with insurance-linked securities issued through Calabash Re III Ltd, a company based in the Cayman Islands.
Risk Management Solutions (RMS), the company that provided the risk modelling analysis, has hailed the bond as the first to provide investors with a modelled event loss table – information that is standard in reinsurance arrangements.
Swiss Re’s modified industry trigger transaction uses insured industry loss estimates provided by US company Property Claims Services that are adjusted by the modelled share of industry loss based on the applicable portfolios.
The reinsurer is also claiming a market first with the type of collateral chosen for the deal – floating rate notes issued by the AAA-rated International Bank for Reconstruction and Development, part of the World Bank.