Aspen Insurance Holdings has created two separate collateralized reinsurance contracts to protect its balance sheet against severe California earthquake and US wind events.
Aspen has entered into a multi-year property catastrophe reinsurance agreement with Ajax Re, a Cayman Islands domiciled reinsurer, to provide up to $100m of reinsurance coverage for Aspen's insurance subsidiaries in the event of one or more California earthquakes.
This transaction provides Aspen with coverage effective from 18 August 2007 through 1 May 2009.
In a separate transaction, Aspen intends, subject to completion of contractual arrangements, to enter into a $100 million industry loss warranty reinsurance contract to provide protection against US catastrophic wind events.
Commenting on the financings, Chris O'Kane, Aspen's chief executive officer, commented: "Aspen continues to manage catastrophe risk exposures by using a combination of capital markets and traditional reinsurance. These transactions enable us to protect our balance sheet from exposure to significant specific perils and support our ratings."
