Amlin Plc said it has obtained reinsurance coverage for U.S.-named storm, U.S. earthquake and European Windstorm perils of up to $200 million from Tramline Re II Ltd, a Bermudian special purpose insurer.
Tramline, in turn, is placing a catastrophe bond for that amount into the capital markets, according to the announcement.
Amlin CEO Charles Philipps explained in a statement that the bond protection “will complement the cover provided by our traditional reinsurance program and Amlin’s existing four year earthquake catastrophe bond” that began on July 1, 2013.
Amlin, the second-biggest Lloyd’s of London insurer by market value, gets plenty from the deal, including fully collateralized protection over a four-year period, starting Jan. 1, 2015. Amlin said the coverage attaches on an index loss basis equivalent to $500 million, and it replaces previous Tramline Re protection placed in 2010, that expires on Dec. 31, 2014.
As Philipps said, the coverage Amlin is buying from Tramline Re goes beyond protection it already buys through the regular reinsurance marketplace, which provides significant risk transfers for key Amlin Group exposures. It’s a different story for the cover provided by the bond, which is based on market share factors applied to market industry losses as reported by PCS and PERILS for Europe, Amlin said.
Aon Benfield Securities arranged the transaction, with risk modeling developed by AIR Worldwide, according to the announcement.
Source: Amlin Plc