Swiss Re seals another hybrid stop-loss deal with JP Morgan

Swiss Re Ltd. said Tuesday it has closed a second hybrid stop-loss deal with J.P. Morgan Chase & Co. The transaction provides $700 million in retrocessional coverage through a combination of insurance-linked securities coverage and bank financing.

Last year, the reinsurer agreed to a similar deal with the bank that provided $1.15 billion in multiyear coverage.

Under the terms of the latest deal, Swiss Re will have protection from severe underwriting losses for the financial years 2023-2027, the reinsurer said in a statement.

The transaction uses a segregated account of the existing Matterhorn Re Ltd. special-purpose insurer vehicle. The transaction has been structured with the potential to increase to $1 billion, the statement said.

The transaction is fully collateralized, with the proceeds to be held in notes issued by the European Bank for Reconstruction and Development, Swiss Re said.