Towers Watson Capital Markets, Inc., the wholly owned subsidiary of global professional services company Towers Watson (NYSE, NASDAQ: TW), announced it recently arranged a private placement catastrophe bond, Sullivan Re 2013-1, which closed at $60 million. Sullivan Re represents the first foray into the insurance-linked securities (ILS) capital markets for the New Jersey Manufacturers Insurance Group (NJM).
"Following NJM's 100th anniversary earlier this year, we are pleased to bring its first ILS transaction to the market," said Ed Hochberg, president, TWCM. "Sullivan Re will supplement NJM's risk management to help ensure that the company continues to satisfy its obligations to its policyholders for years to come."
TWCM arranged for Sullivan Re 2013-1 to contain a single layer of the cedant's risk management program. Sullivan Re has a three-year maturity and will provide per-occurrence indemnity-based, collateralized catastrophe reinsurance coverage for NJM's New Jersey and Pennsylvania marketing territories.
"As a three-year deal, the cat bond provides the cedant with an added dimension to its overall program. By working closely with our brokerage colleagues we are able to bring the most comprehensive solutions in the markets to our cedants," said Rick Miller, TWCM's co-head of ILS.
"The ILS market continues to transform traditional reinsurance while becoming more accessible to smaller players," said Michael Popkin, TWCM's co-head of ILS. "This is creating a market trend we expect to continue, where new cedants are eager to develop instruments that investors want to participate in. We're very pleased our team can fill this important role for new cedants by bringing their perils to the ILS market."