Swiss Re has a strong track record of securitizing California earthquake risk, obtaining over $2 billion of protection through prior Redwood programs since 2001.
Swiss Re's Chief Underwriting Officer, Brian Gray, commented: “Swiss Re has developed a leading market position as a sponsor, underwriter and innovation leader. Our ILS expertise is part of our core offering to clients and a fundamental piece of our own hedging strategy.”
The Redwood XI offering consists of one series of notes, rated “B1” by Moody’s.
Swiss Re Capital Markets acted as sole manager and bookrunner on the note issuance. With the closure of Redwood XI, Swiss Re Capital Markets solidified its standing as the number one lead manager for ILS transactions in 2009. The collateral for this issuance of Redwood XI notes consists of treasury money market funds. Risk modeling and analysis was performed by EQECAT, Inc.
Brian Gray concluded: ”The ILS market gained considerable momentum in 2009. More conservative collateral structures, price convergence with the reinsurance market, and the underlying value of diversification should further accelerate the ILS market in 2010.”