Swiss Re and Tokio Marine & Fire Insurance have announced a unique deal to cut capital costs. The two companies intend to swap parts of their exposure to natural catastrophes to spread the overall cost.

Swiss Re will take on about $900 million in exposure to Japanese earthquake and typhoon risks. Tokio Marine will share the risks for Californian earthquakes, a Florida hurricane and French storms. Swiss Re New Markets Director Juerg Stoll said spreading the risk in this way requires much less risk capital, enabling the companies to use the money for other business.