SCOR has become the first reinsurer to use the new UK ILS regime to issue a catastrophe bond.
The cat bond sponsored by SCOR, Atlas Capital UK 2018, will provide the group with multi-year risk transfer capacity of $300 million to protect itself against named storms in the US, earthquakes in the US and Canada, and windstorms in Europe.
The risk period covered by the bond will run from 1 June 2018 to 31 May 2022.
The transaction, which has received the approval from the Prudential Regulatory Authority (PRA) and the UK regulatory authorities, is part of SCOR’s strategy to diversify its capital protection tools.
Capital market solutions are frequently used by the group for this purpose, having completed 15 transactions since 1999, including cat bonds, sidecars, mortality bonds and innovative contingent capital protections.
Atlas Capital UK 2018 was priced on 24 May and closed on 31 May, with GC Securities acting as sole structuring agent and bookrunner for the deal and Clifford Chance advising SCOR.
CEO of SCOR Global Property and Casual, Victor Peignet thanked the PRA and the UK regulatory authorities for their responsiveness and assistance in the
Peignet added: “This new cat bond offers SCOR additional multi-year collateralised protection, including for European Windstorm, which is in line with the growth of our portfolio as anticipated in ’Vision in Action’.”
“Being the first company to sponsor a cat bond on the London market shows SCOR’s confidence in the UK’s ILS regime and our commitment to the cat bond market, as well as our capacity to innovate.”
