The Hartford Financial Services Group has purchased $247.5 million in multi-year, collateralized reinsurance from Foundation Re II Ltd., a special purpose reinsurance company – commonly known as a “sidecar” – incorporated in the Cayman Islands.
“Foundation Re II financed the reinsurance through the issuance of risk-linked securities to the capital markets,” said the bulletin. Hartford concluded a similar $180 million alternative risk transfer placement with Foundation Re [I] two years ago (See IJ Website Nov. 18, 2004). This current deal essentially renews that coverage.
Hartford said: “The new reinsurance coverage is designed to complement The Hartford’s existing reinsurance and state-specific insurance programs and to enhance its ability to manage risk related to large natural catastrophe losses. The reinsurance is composed of two separate coverages. The first coverage provides $180 million of reinsurance for losses from individual hurricane events along the Gulf and Eastern Coasts of the United States. The second coverage provides $67.5 million of annual aggregate reinsurance for losses resulting from certain earthquake, hurricane, tornado and hailstorm events within the continental United States.
“Goldman, Sachs & Co. acted as sole bookrunner and lead manager for the transaction, and BNP Paribas served as co-manager. Risk Management Solutions provided the modeling services in support of the transaction and will serve as the calculation agent for Foundation Re II.”
Topics Reinsurance
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