$500M catastrophe bond to cover N.C. tropical cyclone risks
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GC Securities, a division of broker-dealer MMC Securities Corp., said Wednesday that it has completed placement of a $500 million catastrophe bond on behalf of the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association.
Known as Tar Heel Re Ltd., the bond is intended to cover the associations' tropical cyclone risks.
Munich Reinsurance Co. acted as co-structurer and co-lead manager in the transaction, the reinsurer said in a statement Wednesday.
Cory Anger, global head of ILS structuring for GC Securities, said in a statement that the bond was structured to provide enhanced coverage for named storms losses instead of only hurricane-related losses and also to expedite the cash flow to NCJUA/NCIUA members post-event.
“The capital markets have uniquely responded to the needs of the NCJUA/NCIUA by providing meaningful and cost-effective annual aggregate capacity while also diversifying and expanding the claims payment capacity of the NCJUA/NCIUA,” Ms. Anger said in the statement.
Glenn Hahn, chairman of the Cary, N.C.-based NCJUA/NCIUA and member company board representative said he was pleased with the issuance. “This transaction, which employs an annual aggregate structure with an expanded definition of 'named storm,' as well as advance reimbursement provisions, provides our associations with enhanced coverage and improved post-event cash flow at a competitive price,” Mr. Hahn said in the statement.
