Zurich-based reinsurer Swiss Re says its subsidiary Swiss Re Capital Markets hasplaced a $200 million insurance-linked security with the capitalmarkets that has the unique feature of covering the reinsuranceexposures of two carriers.
|The multiperil catastrophe-risk vehicle named Combine Reincorporates the risk of reinsured parties Country Mutual InsuranceCo. of Bloomington, Ill., and North Carolina Farm Bureau MutualInsurance Co. Inc. of Raleigh, N.C.
|The bonds cover damage from severe weather includingthunderstorms, hurricanes, earthquakes and winter storms in theUnited States.
|“Because the two companies are geographically diverse, byaggregating their risk we were able to come up with three classesof notes all offering different risk and return profits,” saysRichard Pennay, a senior vice president at Swiss Re. “By doingthat, we were able to attract a broader investor base.”
|The retrocession transaction involved three tranches, combining$100 million of Class A notes rated “Baa1” by Moody's; $50 million“Ba3”-rated Class B notes; and $50 million of riskier, unratedClass C notes.
|Catastrophe modeler AIR Worldwide provided risk analysis for thenotes.
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