Willis Towers Watson Securities has structured and placed €90 million of insurance-linked securities (ILS) for Covea Mutual Insurance Group (Covea), France’s largest domestic property and casualty insurance group.
The Hexagon Reinsurance DAC (Hexagon) catastrophe bond, which settled 15 December, provides Covea with two €45 million tranches of full collateralised protection against windstorm risk in France over a four-year period.
The structure includes an indemnity trigger on an annual aggregate basis with terms mirroring the traditional reinsurance placement, which will ensure effective integration within the overall property catastrophe reinsurance programme.
The transaction was executed in collaboration with Willis Towers Watson’s reinsurance business, Willis Re.
Bill Dubinsky, head of ILS at Willis Towers Watson Securities, said: “We are proud to have supported Covea in its inaugural catastrophe bond transaction. Investors were eager to support the transaction. Hexagon diversifies Covea’s sources of reinsurance capacity with competitive pricing.”
He continued: “This is a unique transaction as it is the first time a European catastrophe bond has supported capacity at the bottom of a traditional reinsurance programme, as well as the first time a European indemnity-trigger catastrophe bond was placed on an annual aggregate basis.”
Alkis Tsimaratos, managing director of Willis Re Europe, the Middle East and Africa, added: “We are delighted at the multiple results achieved in this transaction. In addition to opening up a new source of capital for Covea’s reinsurance strategy, Hexagon offers a stable multi-year commitment at attractive terms, in the middle of a challenging renewal market, marked by future price uncertainties.”
