Collateralised quota shares securitisation for catastrophes
Germany’s second- biggest reinsurer Hannover Re increased its coverage against claims from natural catastrophes to $329m with a “K6” collateralised quota share securitisation with $152m, Bloomberg reports.
Demand by new and existing institutional investors worldwide is “comfortably outstripping supply,” the company said.
Collateralised quota share securitisations allow investors to share the returns as well as the potential claims of a specific reinsurance portfolio.
Complement traditional cover
“Our latest capital market transaction serves to complement our traditional program of protection cover, which we use to protect against peak exposures such as natural catastrophes,” Hannover Re chief executive Ulrich Wallin said.
“Our investors enjoy extremely attractive returns given a normal experience of the covered portfolio.”
The “K6” transaction covers natural catastrophes as well as aviation and marine risks.
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