Germany’s Allianz has reconfirmed its resolve for catastrophe bonds, as a useful and generally accepted approach to transferring some risk to the capital markets. It underlined that commitment using the announcement of the closure of a new cat bond covering US hurricane and earthquake risks, your fourth “takedown under the Blue Fin program by having an issuance size of $40 million.”
In an interview on the Allianz site, Olaf Novak, Chief Risk Officer of Allianz Reinsurance, defined cat bonds generally as “insurance-linked securities which transfer a specified group of natural catastrophe risks in to the capital market. Insurers like Allianz have regional peak catastrophe exposures and these companies spread portions of these risks like European windstorm or US hurricane towards the reinsurance market.”
He also explained that in addition Allianz can “act like a sponsor and spread catastrophe risks for an investor and this means the capital market. Catastrophe bonds are usually multi-year deals. Their trigger mechanism is normally not related to indemnity but more to model losses or perhaps a specific group of event parameters which allows an easy pay-out in case of a qualifying event.”
Like its predecessors, Allianz’ new Series 4 catastrophe bond securities, from Blue Fin Ltd., are “denominated in US dollars and offer investors a coupon of 8.50 % above the yield of US Treasury money market funds.” They cover the “risk of losses from hurricane and earthquake events in the US based on a modeled loss trigger mechanism, and are scheduled to become redeemed in May 2013. As with previous cat bonds under the Blue Fin program, Allianz Re, the reinsurance division of Allianz SE, is responsible for structuring the new transaction.”
Clemens von Weichs, CEO of Allianz Re, explained the capital markets allow us to represent a considerable source of complementary protection for all of us perils. “The occurrence from the March 11 Japanese earthquake and tsunami would be a test for the ILS market, which proved to be who is fit and it is fully functioning. As a repeat sponsor, consistency is a crucial market feature for all of us.”
Novak noticed that the new Blue Fin Series 4 cat bond provides multi-year protection at similar rates as traditional reinsurance from the diversifying source on the fully collateralized basis. The brand new tranche is structured to provide protection against mixtures of medium-sized and enormous events.
“The Blue Fin shelf program enables Allianz to efficiently complement our reinsurance program with non-traditional protection elements on a regular basis,” he stated. “The existing infrastructure means to optimize both lead-time and cost and facilitated the decision to buy more term-aggregate protection.”
In an interview on the Allianz site, Olaf Novak, Chief Risk Officer of Allianz Reinsurance, defined cat bonds generally as “insurance-linked securities which transfer a specified group of natural catastrophe risks in to the capital market. Insurers like Allianz have regional peak catastrophe exposures and these companies spread portions of these risks like European windstorm or US hurricane towards the reinsurance market.”
He also explained that in addition Allianz can “act like a sponsor and spread catastrophe risks for an investor and this means the capital market. Catastrophe bonds are usually multi-year deals. Their trigger mechanism is normally not related to indemnity but more to model losses or perhaps a specific group of event parameters which allows an easy pay-out in case of a qualifying event.”
Like its predecessors, Allianz’ new Series 4 catastrophe bond securities, from Blue Fin Ltd., are “denominated in US dollars and offer investors a coupon of 8.50 % above the yield of US Treasury money market funds.” They cover the “risk of losses from hurricane and earthquake events in the US based on a modeled loss trigger mechanism, and are scheduled to become redeemed in May 2013. As with previous cat bonds under the Blue Fin program, Allianz Re, the reinsurance division of Allianz SE, is responsible for structuring the new transaction.”
Clemens von Weichs, CEO of Allianz Re, explained the capital markets allow us to represent a considerable source of complementary protection for all of us perils. “The occurrence from the March 11 Japanese earthquake and tsunami would be a test for the ILS market, which proved to be who is fit and it is fully functioning. As a repeat sponsor, consistency is a crucial market feature for all of us.”
Novak noticed that the new Blue Fin Series 4 cat bond provides multi-year protection at similar rates as traditional reinsurance from the diversifying source on the fully collateralized basis. The brand new tranche is structured to provide protection against mixtures of medium-sized and enormous events.
“The Blue Fin shelf program enables Allianz to efficiently complement our reinsurance program with non-traditional protection elements on a regular basis,” he stated. “The existing infrastructure means to optimize both lead-time and cost and facilitated the decision to buy more term-aggregate protection.”
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