Hannover Re ups securitized cover

HANOVER, Germany—Hannover Re Group has boosted the volume of last year's so-called K5 risk securitization to $520 million.

This latest deal was placed with institutional investors in North America, Europe and Japan. The capital has been increased by $106 million and was provided by both new and existing investors.

Hannover Re said that existing investors used the latest K5 deal as an opportunity to reinvest their profits from the previous year. This securitization deal is planned to run until Dec. 31, 2008.

The reinsurer said that it has also extended its traditional protection covers used to protect against peak exposures, such as natural catastrophes, and that it would therefore no longer need to make use of structured covers.

"With these latest transactions we have made our portfolio even more weatherproof. We are optimally placed to benefit from the further profitable market opportunities that will open up in worldwide catastrophe business going forward," according to Wilhelm Zeller, chief executive officer of Hannover Re.

The portfolio assembled for the K5 securitization comprises nonproportional treaties for property catastrophe, aviation and marine--including offshore--reinsurance.

Some 42% of this business is passed on to the investors, Hannover Re said.

It added that the new securitization transaction will enable the company to write more business while conserving its capital resources.