Swiss Re Secures $106.5 Million Vega Cat Bond for Multiple Perils

December 14, 2010

Swiss Re announced that it has obtained $106.5 million in coverage “against North Atlantic hurricane, European windstorm, Californian earthquake, Japanese earthquake and Japanese typhoon through a natural catastrophe protection program named Vega Capital Ltd.”

Swiss Re added that it is “is securing three years’ of natural catastrophe protection on both a multi-event and multi-peril basis through a second takedown under the Vega cat bond program. Vega has a flexible structure that allows multiple issuances of securities at any time. Vega is the first cat bond program with a reserve account to enhance protection to note holder principal.”

Martin Bisping, Swiss Re’s Head of Non-Life Risk Transformation, commented: “Vega allows Swiss Re to manage earnings volatility arising from peak natural catastrophe perils, over multiple events. It is an innovative cat bond that combines transparent indices for five different natural catastrophe scenarios with an efficient structure. Vega underscores our track record in product innovation, transforming high frequency cat events into capital markets.”

Swiss Re also noted that investors “chose between two risk layers, benefiting from enhanced index triggers and achieving diversification across five natural catastrophe risks in different regions of the world.”

Source: Swiss Re

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