California’s largest cat bond issuance proves to be one of the market’s largest deals

California’s largest cat bond issuance

Swiss Re structures California Earthquake Authority’s (CEA) largest cat bond issuance to date.

Swiss Re Capital markets structured and placed the issuance of $925m of ILS by Ursa Re.

In an interview with Global Reinsurance, Swiss Re chief executive reinsurance Moses Ojeisekhoba said that the (re)insurance industry had a role to play in dealing with quake in California: “I don’t think all solutions rest with the government in either emerging markets or even in developed markets. I believe the solution rests in trying to raise awareness. Roughly 10% of Californians are insured for earthquake. The industry has a role to play in being able to provide far better capacity.”

According to recent reports from Swiss Re: “Swiss Re Capital Markets underwrote the transaction through two classes of principal-at-risk variable rate notes issued by Ursa Re Ltd., a Bermuda exempted company licensed and registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.”

Swiss Re Capital Markets co-head of ILS Judy Klugman said: “The transaction was well received by investors, as demonstrated by, among other factors, the final issuance size.”

She added: “We were also glad to be able to support the CEA in its desire to make future issuances more efficient by introducing pre-modeled Program Notes. Such Program Notes are intended to allow the CEA to tap investor demand on a more timely and cost efficient basis.”

California’s largest cat bond issuance