$70M cat bond is first in Swiss francs

GC Securities, a division of MMC Securities Corp., has placed the first Swiss-franc denominated catastrophe bond for a new issuer in the market, GC Securities said in a statement Tuesday.

The 70 million Swiss franc ($69.9 million) private catastrophe bond is to provide Gebäudeversicherung Bern of Ittigen, Switzerland, with one year of aggregate protection on identical coverage terms to its traditional reinsurance program positioned alongside traditional reinsurance coverage on each layer of GVB’s program, the statement said.

The bond covers storms, hail, flood, landslide, rockslide, rock avalanche, avalanche, snow pressure, snow slide and earthquake risk, according to a spokeswoman for GC Securities. It was issued through Kaith Re Ltd., a Class 3 Bermuda insurer and was the first time GVB has tapped the capital markets, GC Securities said in its statement.

“We are delighted to have facilitated GVB’s first catastrophe bond transaction and pioneered the first Swiss franc-denominated catastrophe bond. This private catastrophe bond transaction demonstrates the growing application of alternative capital to insurers, reinsurers, sovereigns and corporates globally as well as the ability for capital markets investors to provide meaningful capacity with coverage terms (including for non-modeled perils) consistent with the traditional reinsurance markets,” Cory Anger, Global Head of ILS Structuring, GC Securities, said in the statement.