AIG sponsors $400M catastrophe bond for U.S. hurricanes, earthquakes
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American International Group Inc. has sponsored a $400 million catastrophe bond with Compass Re Ltd., a Bermuda-based special purpose insurer, new York-based AIG said Wednesday.
The bond, which will provide peak-zone protection against U.S. hurricanes and earthquakes, was closed on Dec. 27, 2012, and will run through December 2014. The bond features an index trigger with state-specific payment factors, the company said.
The transaction is fourth catastrophe bond issued by AIG in the past three years, and brings the total amount of bonds sponsored by AIG over that period to $1.85 billion, according to AIG.
According to a report issued in November 2012 from Willis Capital Markets & Advisory, part of London-based global insurance broker Willis Group Holdings P.L.C., total catastrophe bond issuance for 2012 was in the $5.5 billion to $6 billion range.
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