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Swiss Re Obtains $106.5M of Nat Cat Protection through Vega

Posted on 14 Dec 2010

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Swiss Re has obtained $106.5 million in coverage against North Atlantic hurricane, European windstorm, Californian earthquake, Japanese earthquake and Japanese typhoon through a natural catastrophe protection programme named Vega Capital Ltd (“Vega”).

Swiss Re is securing three years' of natural catastrophe protection on both a multi-event and multi-peril basis through a second takedown under the Vega cat bond programme.  Vega has a flexible structure that allows multiple issuances of securities at any time. Vega is the first cat bond programme with a reserve account to enhance protection to noteholder principal.

Martin Bisping, Swiss Re Head of Non-Life Risk Transformation, says: "Vega allows Swiss Re to manage earnings volatility arising from peak natural catastrophe perils, over multiple events. It is an innovative cat bond that combines transparent indices for five different natural catastrophe scenarios with an efficient structure. Vega underscores our track record in product innovation, transforming high frequency cat events into capital markets."

Investors chose between two risk layers, benefiting from enhanced index triggers and achieving diversification across five natural catastrophe risks in different regions of the world.

The private placement closed on 13 December 2010 and involved USD 106.5 million of principal at-risk variable rate notes which have been purchased by a variety of institutional investors according to Rule 144A. This private placement was structured and underwritten by Swiss Re Capital Markets.