Compass Re deal provides US insurer with hurricane and earthquake coverage

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AIG has entered into a reinsurance deal with Bermudian special purpose insurer Compass Re Ltd to provide $400m of cover against US hurricanes and earthquakes.

To fund the deal Compass Re has issued a $400m catastrophe bond in a single tranche.

The deal closed on 27 December 2012 and provides AIG with fully collateralised coverage against any losses through to December 2014.

Including this deal, AIG has sponsored $1.85bn in catastrophe bonds in the past three years.

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