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Willis Towers Watson completes $105.7 million catastrophe bond

Posted On: Dec. 19, 2017 11:55 AM CST

Willis Towers Watson Securities has completed a €90 million ($105.7 million) catastrophe bond for France’s Covea Mutual Insurance Group Co., Willis Towers Watson P.L.C. said Tuesday.

Hexagon Reinsurance DAC, which settled Dec. 15, provides Covea with two €45 million tranches of fully collateralized protection against windstorm risk in France for four years, Willis Towers Watson said in a statement.

Hexagon was completed in collaboration with Willis Towers Watson’s reinsurance business, Willis Re, and features an indemnity trigger on an annual aggregate basis with terms mirroring the traditional reinsurance placement, “to ensure effective integration within the overall property catastrophe reinsurance program,” the statement said.

The deal marks the first time a European catastrophe bond has supported capacity at the bottom of a traditional reinsurance program, and the first time a European indemnity-trigger catastrophe bond was placed on an annual aggregate basis, said Bill Dubinsky, head of ILS at Willis Towers Watson Securities.

“Investors were eager to support the transaction,” Mr. Dubinsky said in the statement. “Hexagon diversifies Covea’s sources of reinsurance capacity with competitive pricing.”

In addition to opening a new source of capital for Covea’s reinsurance strategy, Hexagon offers a stable, multiyear commitment at attractive terms, said Alkis Tsimaratos, managing director of Willis Re EMEA W/S.

“The transaction also demonstrates that attachment levels usually reserved for traditional structures in Europe are equally attracting catastrophe bond investors,” Mr. Tsimaratos said in the statement.