Swiss Re obtained $106.5 million of natural catastrophe protection through its existing Vega capital program.
The Rule 144A private placement closed on Dec. 13 and had $106.5 million of principal at-risk variable rate notes bought by various institutional investors. This private transaction was structured and underwritten by Swiss Re Capital Markets.
Under the Vega cat bond program, Swiss Re is securing three years of natural catastrophe protection on both a multi-event and multi-peril basis via a second takedown .
Vega has a flexible structure that allows multiple issuances of securities at any time. It is also the first cat bond program with a reserve account to enhance protection to note-holder principal.
Insurers and reinsurers use cat bonds to transfer risks on their books, such as storms and earthquake, to capital market investors. The capital raised from these transactions is then used to underwrite new insurance business.
Investors chose between two risk layers. They benefited from enhanced index triggers and achieved diversification across five natural catastrophe risks in different regions of the world.