Swiss Re Places $130 Million Cat Bond for Hurricanes, European Wind

November 9, 2011

Swiss Re has obtained a further $130 million in protection through the Successor X Ltd. catastrophe bond program, which covers exposures to “North Atlantic hurricane and European windstorm.” Swiss Re noted that this is the fifth time that it “has used the Successor X program to transfer risks into the capital markets.”

The reinsurer explained that it would receive up to “$130 million of payments in the event of European windstorms and of North Atlantic hurricanes of a certain magnitude. The flexible structure of the Successor X program enables Swiss Re to move quickly in response to market conditions, securing multi-year protection at terms which are attractive to the company and investors.”

The new cat bond issuance covers a four-year period, ending in November 2015. Swiss Re said it “follows four previous take-downs from the Successor X program, after 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.”

Martin Bisping, Swiss Re’s Head of Non-Life Risk Transformation, commented: “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. Successor X allows us to seize opportunities to transfer risk at favorable terms and to support growing demand for natural catastrophe capacity from our clients.”

Swiss Re also noted that the” transaction combined with prior Successor programs has allowed Swiss Re to obtain $2.39 billion of protection against natural catastrophe events.”

Matthias Weber, Swiss Re’s Head of the Property and Specialty Division noted: “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,”
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Source: Swiss Re

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