Achmea returns with a €40m Windmill I Re 2017-1 cat bond

by Artemis on July 3, 2017

Dutch group reinsurer Achmea Reinsurance Company, part of the Achmea Group of re/insurance companies, has returned to the catastrophe bond market for its second catastrophe bond transaction, with a €40 million Windmill I Re Ltd. (Series 2017-1) deal that completed just before the end of June.

Achmea first visited the cat bond market in December 2013, with a European windstorm exposed €40 million Windmill I Re 2013-1 deal that was issued by broker Aon using a streamlined, privately marketed and issued approach in order to reduce the ceding companies costs.

This Windmill I Re 2017-1 cat bond was completed late last week, with the €40 million of notes issued listing on the Bermuda Stock Exchange (BSX) on Friday. Details are scarce but we presume this is a renewal of sorts for the 2013 transaction which had matured at the end of last year.

The sponsor is assumed to be Achmea Reinsurance Company NV, as it was in the 2013-1 Windmill deal, ceding risk from the Achmea group Dutch non-life companies property portfolios to Bermudian SPI Windmill I Re Ltd., where the risk was transformed and then issued as securities to investors in this 2017-1 issuance.

We assume the notes cover €40m of European windstorm risks, like the 2013 transaction, and are structured on an indemnity trigger basis as the previous deal was. It is possible that other risks are involved, as Achmea has broad exposure to European property catastrophe perils.

The reinsurance cover afforded by this Windmill I Re 2017-1 cat bond runs for a three-year risk period and the notes are due to mature on the 5th July 2020.

Aon Securities is assumed to be the capital markets team behind this second Achmea catastrophe bond, likely responsible for both structuring and placing of the deal. We also assume this to be a private offering, like the 2013-1 Windmill I Re cat bond, possibly issued using the Aon CatStream platform and placed with a small group of ILS investors.

The €40m tranche of Series 2017-1 notes were listed on the Bermuda Stock Exchange under Section V as Insurance Linked Securities.

Achmea is a large Dutch insurance group, with a number of brands across property, casualty, life, health and pensions. The firm also owns Achmea Reinsurance Company NV, its group reinsurer which predominantly retro cedes risk from the Achmea group to the reinsurance market as well as offering some reinsurance to a number of third parties.

Accessing the catastrophe bond market helps Achmea secure efficient fully-collateralized reinsurance capacity to diversify its sources of protection.

This Windmill I Re Ltd. (Series 2017-1) catastrophe bond has been added to the Artemis Deal Directory.

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