Any disbursement will be based on storm losses incurred by the North Carolina Joint Underwriting Association and the North Carolina Insurance Underwriting Association
Swiss Re has declared plans to sell a $125 million catastrophe bond, covering losses to North Carolina’s insurer of last resort from hurricanes in the US state – reported in Reuters.
Swiss Reinsurance America Corporation will be cedent for the bond, to be issued through Cayman Islands vehicle, Parkton Re. Any disbursement, however, will be based on storm losses incurred by the North Carolina Joint Underwriting Association (NCJUA) and the North Carolina Insurance Underwriting Association (NCIUA).
Swiss Re and Guy Carpenter are acting as arrangers for the deal.
NCJUA and NCIUA provide basic property insurance to people who are not able to buy such cover commercially. While not an arm of the state government, they are funded by property and casualty insurance companies that operate locally. Their operations are subject to review by North Carolina’s insurance commissioner.
Parkton Re will be the first catastrophe bond sale associated with NCJUA and NCIUA. German reinsurer, Hannover Re is also currently promoting a E75 million catastrophe bond.