Towers Watson unit arranges catastrophe bond for Cincinnati Insurance
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Towers Watson Capital Markets Inc. said on Monday that it has arranged a $61.2 million catastrophe bond for the Cincinnati Insurance Co.
The one-year, indemnity-based collateralized bond, known as Skyline Re 2013-1, will provide catastrophe reinsurance coverage for the Cincinnati-based provider of property/casualty coverage. Specifically, the bond will transfer risks associated with the New Madrid earthquake exposure on a per-occurrence basis, as well as severe convective storm losses on an aggregate basis.
The bond has an innovative structure, said Michael Popkin, a TWCM senior vice president.
“The breadth and depth of investor involvement in the transaction clearly demonstrates the acceptance of the private placement catastrophe bond technology that Towers Watson is employing to bring new cedants and new perils to market,” Mr. Popkin said in a statement.
“This deal highlights strong support for the cedent and the appeal of diversifying perils for insurance-linked securities investors,” added Rick Miller, a TWCM senior vice president. “Towers Watson will continue to build its insurance-linked securities platform, and we look forward to bringing other new cedents to market in the future.”
Towers Watson Capital Markets Inc. is a wholly owned subsidiary of New York-based Towers Watson & Co.
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