Latest $40m issuance provides US quake and wind cover
German insurer Allianz has completed the fourth issuance from its Blue Fin catastrophe bond programme.
The $40m of new issuance from the programme, which matures in may 2013, protects Allianz from medium-sized and large US hurricane and windstorm events.
The bonds’ payout is triggered by modelled losses reaching a certain point. The deal was structured by Allianz’s group reinsurer, Allianz Re.
"The occurrence of the March 11 Japanese earthquake and tsunami was a test for the ILS market, which proved to be in good shape and is fully functioning," said Allianz Re CEO Clemens von Weichs in a statement. "As a repeat sponsor, consistency is a crucial market feature for us."
Allianz said the latest Blue Fin issuance allowed it to obtain multi-year, fully collateralised cover at a similar rate to traditional reinsurance. "The Blue Fin shelf programme enables Allianz to efficiently complement our reinsurance programme with non-traditional protection elements on a regular basis," said Allianz Re chief risk officer Olaf Novak. "The existing infrastructure has allowed to optimise both lead-time and cost and facilitated the decision to buy more term-aggregate protection."
The Blue Fin 4 bonds pay investors 8.5 percent above the yield of US Treasury money market funds.