Aon Benfield Securities Completes Quake Protection for Israeli insurer I.D.I.

March 5, 2014

Aon Benfield Securities, the investment banking division of global reinsurance intermediary and capital advisor Aon Benfield, announced that it has “successfully completed a ‘Cat in the Box’ transaction for I.D.I. Insurance Company Ltd. (Israel Direct Insurance), protecting the insurer against potential losses following an earthquake event.”

The transaction was facilitated by Aon Benfield Securities and was structured by Munich Re. It is “based on a parametric trigger and provides I.D.I. with NIS50 million ($14 million) of cover on an annual basis.”

Steven Kostyn, Vice President – Risk and Reinsurance, at I.D.I. said: “We are very happy with the solvency-related value of the coverage secured via this parametric transaction, which provides protection not only for standard insurance risks but also for the wider financial and operational risks to an insurance company involved in an earthquake event.”

Aon Benfield Securities CEO Paul Schultz said: “We are pleased to have arranged the first Cat in the Box parametric contract for an Israeli insurance company.  We believe this creates new opportunities for clients in the Israeli market and we greatly appreciate the collaboration with I.D.I. and with Munich Re in bringing this first deal to a successful conclusion.”

Andreas Pollmann, Client Management Executive at Munich Re, added: “Munich Re is pleased to be the risk carrier for this transaction with I.D.I. demonstrating the ability and commitment to complement traditional reinsurance with innovative and sophisticated solutions also to the Israeli insurance market. The realization of this transaction together with Aon Benfield Securities is another example of good cooperation for the benefit of the clients in the Israeli market.”

Aon Benfield noted that its “Impact Forecasting team supported the transaction through the provision of catastrophe modeling solutions and expertise in catastrophe management.

Goran Trendafiloski, a catastrophe model developer within Impact Forecasting who specializes in the development of European earthquake models, said: “Impact Forecasting’s Israel earthquake model and catastrophe modelling platform ELEMENTS provides an up-to-date architecture to model clients’ data with the highest spatial and exposure resolution, thus contributing towards a more reliable estimation of I.D.I.’s earthquake risk and its understanding and quantifying of the uncertainty. The transparency of the model’s technical details helped facilitate I.D.I.’s decision to purchase this parametric cover.”

Source: Aon Benfield Securities

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