GC Securities has completed the first ever Swiss franc-denominated catastrophe bond to benefit Gebäudeversicherung Bern (GVB).
The Regulation S placement of Principal At-Risk Variable Rate Notes, with notional principal at CHF70,000,000 ($69.5 million), has been made through Kaith Re.
Kaith Re is a Bermuda exempted company registered as a Class 3 insurer in Bermuda under the Insurance Act 1978 and registered as a segregated account company (SAC) under the SAC Act, acting in respect of its segregated account designated Leine Re, to benefit GVB.
The protection provided to GVB via the catastrophe bond is positioned alongside traditional reinsurance on each layer of GVB’s traditional reinsurance programme.
It provides one year of annual aggregate protection to GVB on identical coverage terms to its traditional reinsurance programme.
GC Securities served as sole placement agent.
Patrick Lerf, CFO of GVB, commented: “GVB appreciates the assistance of GC Securities, Kaith Re and the investors in successfully completing our first catastrophe bond. This transaction demonstrates our ongoing commitment to provide financial security to our policyholders.”
GC Securities stated that the active involvement of the key participating investment managers (LGT ILS Partners and Schroders Investment Management) early in the process streamlined the catastrophe bond implementation to provide GVB with a capital markets-based solution covering Swiss natural peril catastrophe risk.
Cory Anger, global head of insurance-linked securities structuring at GC Securities, said: “We are delighted to have facilitated GVB’s first catastrophe bond transaction and pioneered the first Swiss franc-denominated catastrophe bond.”
“This private catastrophe bond transaction demonstrates the growing application of alternative capital to insurers, reinsurers, sovereigns and corporates globally as well as the ability for capital markets investors to provide meaningful capacity with coverage terms (including for non-modelled perils) consistent with the traditional reinsurance markets.”
