Declared the closing of a $200 million insurance-linked securities offering of hurricane risk in North Carolina through Parkton Re
Swiss Re, a Zurich-based reinsurer, has closed a $200 million insurance-linked securities offering of hurricane risk in North Carolina through Parkton Re, a Cayman Islands exempted company.
Swiss Reinsurance America Corporation will purchase reinsurance from Parkton Re. Thus, transforming this catastrophe bond issuance into a source of capacity for a reinsurance agreement that provides the North Carolina Joint Underwriting Association (the FAIR plan) and North Carolina Insurance Underwriting Association (the Beach Plan), $200 million of coverage over two years.
The catastrophe bond intends to use an indemnity trigger, based on storm losses incurred by the Association. AIR Worldwide Corporation (AIR) provided the expert risk modeling analysis.
Stefano Sola, managing director, Insurance-Linked Securities at Swiss Re Capital Markets, said: “This is the first time that a collective pool in the US has accessed the capital markets for hurricane risk. We acted as the transformer between the Associations and Parkton Re, which helped the Associations to concentrate on their primary goal, accessing the capital markets for capacity, rather than focussing on the administrative details of the bond transaction.”