On Thursday last week, Swiss Re Capital Markets announced that it successfully structured and placed the issuance of $100 million of insurance-linked securities by Laetere Re Ltd. on behalf of United Property & Casualty Insurance Company, Family Security Insurance Company, Inc. and Interboro Insurance Company (together, “UPC”).
The transaction is UPC’s debut catastrophe bond and covers named storms and earthquakes affecting certain coastal states of the U.S.
In a statement about the issuances, Jean-Louis Monnier, Co-Head of ILS at Swiss Re Capital Markets, said Laetere Re Ltd. is notable because it is the first catastrophe bond sold at a discount since 2009. Also noteworthy, he said, was the incorporation of a cascading per occurrence indemnity trigger
Swiss Re explained in a follow-up note to Carrier Management that the cascading per occurrence trigger is typical for Florida companies, such as UPC. With such a trigger in place, the attachment point is effectively reduced as successive events erode the cover.
Swiss Re Capital Markets underwrote the transaction via three classes of principal at-risk variable rate notes issued by Laetere Re Ltd. Each of the $30 million Class A notes, the $40 million Class B notes and the $30 million Class C notes has a one-year risk period starting June 1, 2016 and was structured as a discount note.
Source: Swiss Re Capital Markets