Credit Agricole & Swiss Re participate in first Canadian life insurance securitization, Vecta I Ltd.


Some further details are gradually emerging on the Vecta I Ltd. embedded value life insurance securitization thanks to press releases from some of the transactions participants. The first embedded value deal to come to market since 2007, Vecta I Ltd. is also the first insurance-linked securitization of Canadian life insurance embedded value.

Aurigen Reinsurance were the sponsor of this deal. By completing this issuance Aurigen benefit by securitizing mortality and lapse risk in a defined block of reinsured life policies and being able to monetise the cash flows associated with life insurance and mortality business upfront.

“We are very excited to have completed the very first Canadian embedded value securitization,” said Alan Ryder, President and CEO of Aurigen Capital Limited. “The Vecta transaction demonstrates Aurigen’s leadership, innovation and access to the capital markets. It greatly diversifies our existing capital structure and provides Aurigen with a substantial amount of additional capital to continue the development of its business.”

Credit Agricole Securities were first to publish a press release regarding their involvement in this deal. They acted as structuring lead on the transaction and also joint-bookrunner.

“We were delighted to advise Aurigen on this transaction which demonstrates our structuring and placement capabilities in this field,” said Vincent Fleury, Global Securitization Head, Credit Agricole.

Swiss Re have also announced their participation in this transaction in which their Swiss Re Capital Markets division acted as joint-bookrunner alongside Credit Agricole.

“We are pleased to play an integral role in Canada’s first embedded value securitization,” says Alison Martin, Swiss Re’s Head Life & Health. “The Vecta transaction demonstrates how ILS technology can supplement a capital management programme for Canadian (re)insurers”.

Another party involved in this embedded value life securitization was  consultant firm Oliver Wyman who provided independent third-party risk analysis for the notes.

We’ve added this transaction to our ILS & cat bond deal directory. Full details can be found here.

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