Swiss Re, Mitsui Sumitomo Arrange $100M Catastrophe Risk Swap

August 6, 2003

Swiss Re and Mitsui Sumitomo Insurance Company have arranged a $100 million catastrophe risk swap. The catastrophe risk swap is structured in two risk exchanges of $50 million each: Japan typhoon for North Atlantic hurricane and Japan typhoon for European windstorm.

Swiss Re and Mitsui Sumitomo Insurance Company have arranged a $100 million catastrophe risk swap. The catastrophe risk swap is structured in two risk exchanges of $50 million each: Japan typhoon for North Atlantic hurricane and Japan typhoon for European windstorm.

Under the terms of the transaction, Swiss Re will exchange a part of its North Atlantic hurricane and European windstorm risks for Mitsui Sumitomo’s Japanese typhoon exposure. These represent ‘peak risks’ for both parties. By swapping segments of Japanese catastrophe event exposure with North Atlantic and Europe catastrophe risks, Mitsui Sumitomo and Swiss Re are both reportedly able to improve the diversification of their risk portfolios.

Bruno Porro, Swiss Re’s Chief Risk Officer, noted, “Swiss Re is continually monitoring and enhancing its overall risk diversification and exposure to peak risks. This transaction, which is the latest to which Swiss Re has been both a party and structurer, furthers this goal. It is positive to see that the skills and expertise of both Swiss Re and Mitsui Sumitomo, developed in previous transactions, have contributed to the success of this latest catastrophe swap.”

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