The transaction is designed to offset the potential financial impact to NRG if a hurricane were to affect its business in the Houston area. This innovative risk management vehicle, known as Willis Hurricane Load-Protection, allowed NRG to lower hurricane risk hedging costs by embedding two additional energy variables into the payout formula. Any payout would not require a prolonged claims handling process.
NRG and Willis partnered to access an unusually wide spectrum of markets: insurance, re-insurance, retrocession, banking, hedge funds and OTC derivatives. The deal term is through October 2009. Other key terms and conditions of the transaction are considered confidential.
About NRG
NRG Energy, Inc., a Fortune 500 company, owns and operates one of the country's largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the Company's power plants provide more than 24,000 megawatts of generation capacity-enough to supply more than 20 million homes. NRG's retail business, Reliant Energy, serves more than 1.6 million residential, business, commercial and industrial customers in Texas. A past recipient of the energy industry's highest honors-Platts Industry Leadership and Energy Company of the Year awards, NRG is a member of the U.S. Climate Action Partnership (USCAP), a group of business and environmental organizations calling for mandatory legislation to reduce greenhouse gas emissions. More information is available at www.nrgenergy.com.
About Willis Group Holdings
Willis Group Holdings Limited (NYSE: WSH) is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 20,000 Associates serving clients in some 190 countries. Additional information on Willis may be found at www.willis.com.