Swiss Re successfully places USD 150 million in a flood and earthquake securitization for the benefit of Allianz
10 April 2007, Zurich
Swiss Re has successfully structured and placed USD 150 million of securities covering flood and earthquake catastrophic events in Great Britain, Canada and the United States on behalf of Allianz.
Swiss Re structured and placed the securitization for Allianz Global Corporate, Specialty AG and acted as the sole bookrunner for the initial offering of USD 150 million. The multiperil issuance is part of a USD 1 billion programme, which provides protection against high severity losses incurred from earthquakes in Canada or the United States (excluding California) and river floods in Great Britain. This offering of notes by Blue Wings Ltd., closed on 3 April 2007.
Blue Wings is the first insurance linked securities programme to provide cover against flood. In case of a natural catastrophic event of the perils defined, the programme would pay a claim based on pre-defined parameters and calculated by the risk modelling company Risk Management Solutions (RMS).
The loss caused by an earthquake in Canada or the United States will be based on a modeled loss of a notional portfolio of exposures. If in an earthquake event, the notional modeled loss amount exceeds pre-defined attachment points, the noteholders will experience a reduction of their principal.
To calculate river floods there are at least 50 reference locations across Great Britain at which flood depth is measured. For an event to trigger the bonds, river segments connected with at least four reference locations must be on severe flood warning by the UK Environmental Agency.
Details of the notes placed in the initial offering are:
|Class||Size in mio.||Rating||Expected Maturity||Coupon|
|A||150||BB+||10 January 2012||Libor +315 b.p. p.a.|
The transaction attracted considerable investor demand, was over-subscribed, and met by strong interest from a wide variety of investors including, dedicated ILS Funds, Hedge Funds and Money Managers.
All these securities have been sold. This announcement is a matter of record only. The notes referred to herein have not been and will not be registered under the securities laws of any jurisdiction, and any offer or sale thereof may only be made in a transaction exempt from registration.
Notes to editors
Swiss Re is the world's leading and most diversified global reinsurer. The company operates through offices in more than 25 countries. Founded in Zurich, Switzerland, in 1863, Swiss Re offers financial services products that enable risk-taking essential to enterprise and progress. The company's traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated "AA-" by Standard, Poor's, "Aa2" by Moody's and "A+" by A.M. Best.
Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-looking statements typically are identified by words or phrases such as 'anticipate', 'assume', 'believe', 'continue', 'estimate', 'expect', 'foresee', 'intend', 'may increase' and 'may fluctuate' and similar expressions or by future or conditional verbs such as 'will', 'should', 'would' and 'could'. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re's actual results, performance, achievements or prospects to be materially different from any future results, performance, achievements or prospects expressed or implied by such statements. Such factors include, among others:
- the impact of significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions, including, in the case of acquisitions, issues arising in connection with integrating acquired operations;
- cyclicality of the reinsurance industry;
- changes in general economic conditions, particularly in our core markets;
- uncertainties in estimating reserves;
- the performance of financial markets;
- expected changes in our investment results as a result of the changed composition of our invested assets or changes in our investment policy;
- the frequency, severity and development of insured claim events;
- acts of terrorism and acts of war;
- mortality and morbidity experience;
- policy renewal and lapse rates;
- changes in rating agency policies or practices;
- the lowering or withdrawal of one or more of the financial strength or credit ratings of one or more of our subsidiaries;
- changes in levels of interest rates;
- political risks in the countries in which we operate or in which we insure risks;
- extraordinary events affecting our clients, such as bankruptcies and liquidations;
- risks associated with implementing our business strategies;
- changes in currency exchange rates;
- changes in laws and regulations, including changes in accounting standards and taxation requirements; and
- changes in competitive pressures.
These factors are not exhaustive. We operate in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.