Swiss Re has obtained another $130 million in protection via the Successor X Ltd. catastrophe bond program. This program covers North Atlantic hurricane and European windstorm.
The deal is the fifth time that Swiss Re has used the Successor X program to transfer risks into the capital markets.
The firm has entered into a transaction with Successor X to receive the said amount of payments when European windstorms and of North Atlantic hurricanes of a certain magnitude happen. The program's flexible structure allows the company to move quickly to respond to market conditions, securing multi-year protection at terms that are attractive for both the company and to investors.
Covering a four-year period, ending in November 2015, the transaction follows four previous take-downs from the Successor X program. The prior deals are as follows: a first for $150 million in December 2009; a second for $120 million in May 2010; a third for $170 million in December 2010; and a fourth for $305 million in February 2011.
"After a brief dip in returns in the wake of the Japan earthquake, the ILS marketplace has rebounded, demonstrating the commitment that investors have to catastrophe bonds," Martin Bisping, Swiss Re's head of non-life risk transformation, said. "Successor X allows us to seize opportunities to transfer risk at favourable terms and to support growing demand for natural catastrophe capacity from our clients."
This deal combined with prior Successor programs has allowed Swiss Re to obtain $2.39 billion of protection against natural catastrophe events.
"Insurance-linked securities remain a cornerstone of our hedging strategy, giving us a competitive advantage by allowing us to manage peak catastrophe risk more effectively," said Matthias Weber, the head of the property and specialty division.
The Successor X notes were sold in a Rule 144A private placement.