Hannover Re expands its ILS activities completing three further transactions
For the first time Hannover Re has transferred for the American Integrity Insurance Company of Florida (AIIC) Florida named storm and severe thunderstorm risks to capital market investors. The amount of capital raised from institutional investors is USD 210 million; the transaction matures in approximately three years.
In two further transactions Hannover Re has again transferred risks to capital market investors for the Texas Windstorm Insurance Association (TWIA) and Massachusetts Property Insurance Underwriting Association (MPIUA). The catastrophe bond volumes for TWIA and MPIUA amount to USD 400 million and USD 350 million respectively. These transactions also have a maturity of approximately three years.
GC Securities, a division of MMC Securities LLC, served as the sole structurer and sole bookrunner on each of these three transactions.
"We are delighted that with our three latest transactions we have been able to not only maintain existing partnerships but also acquire a new client. In recent years we have substantially enlarged our market share of transformer business with the placement of additional exposures in excess of USD 2.5 billion", Jurgen Graber, the responsible member of the Executive Board, noted. Through its ILS activities Hannover Re is able to generate margins that are both low-risk and attractive.
Since the placement of the world's first risk securitisation by Hannover Re in 1994, the company has utilized the entire spectrum of the ILS market. Along with the aforementioned risk transfer for clients, it also protects its own risks through the capital market. Furthermore, the company is itself active as an investor in catastrophe bonds.