Europe continues to warm to the idea of securitization as a financing tool for risk transfer within the life insurance industry. A new extreme mortality cat bond is the latest transaction added to the growing list of sophisticated deals that have come to market in recent years.

AXA Cessions, a subsidiary of French insurance group Axa, plans to transfer mortality risk from its reinsurance contracts to bond investors through the sale of dollar and euro denominated notes. In 2003, Swiss Re Capital Markets used Vita Capital Ltd. to issue $400 million of mortality catastrophe-indexed notes and in 2005 it used Vita Capital II Ltd. to issue $362 million of notes. In 2006, Scottish Re set up Tartan Capital Ltd. to issue $155 million of mortality-linked notes. AXA Cessions is now looking to the capital markets to diversify the coverage for its mortality catastrophe exposure.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.