Swiss Re issues catastrophe bond combining risks of two entities
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NEW YORK—Swiss Re Capital Markets has issued a catastrophe bond combining the risk of two reinsured parties into a single transaction, the company said Monday.
The Swiss Reinsurance Co. Ltd. unit says the catastrophe bond vehicle is the first of its kind to combine the risk of two reinsured parties. Through the bond—Combine Re Ltd.—Swiss Re has securitized $200 million in multiperil annual aggregate indemnity protection for two separate insurers: Bloomington, Ill.-based Country Mutual Insurance Co., and Raleigh, N.C.-based North Carolina Farm Bureau Mutual Insurance Co. Inc., covering the two from the U.S. perils of severe thunderstorm, hurricane, earthquake and winter storm.
"The Combine Re transaction further develops the cat bond market by providing investors with a true range of risk and return profiles, while providing both Country Mutual and the North Carolina Farm Bureau with significant annual aggregate protection, designed to respond during years of sustained multiperil insurance losses," Markus Schmutz, managing director, Swiss Re Capital Markets, said in a statement.
"Catastrophe bonds continue to be a cornerstone of Swiss Re's own risk management strategy and Swiss Re's extensive (insurance-linked securities) capabilities have harnessed the benefits for both Country Mutual and the North Carolina Farm Bureau," he said.
Independent third-party risk analysis for the notes was provided by Boston-based risk modeling firm AIR Worldwide.
