Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

SCOR finalizes natural catastrophe contingent capital solution


SCOR has announced that it has finalised the launch of its new 3 year, €150m natural catastrophe coverage facility. The new facility takes the form of an event driven guaranteed equity as an innovative contingent capital solution. This new contingent capital arrangement extends the protection SCOR has from natural catastrophes (which include other reinsurance and cat bond cover through its Atlas series).

The facility utilises an agreement between SCOR and Swiss Bank UBS which commits UBS to subscribe to new shares in SCOR when natural catastrophe losses they experience in their insurance and reinsurance business exceed pre-defined trigger points any time between 1st Jan 2011, and 31st Dec 2013.

The contingent capital equity line available to SCOR through this arrangement will be €150m and will be available in two separate tranches of €75m each.

This facility is a sensible way to diversify their sources of reinsurance cover and acts as a new layer which is uncorrelated with their cat bonds. For more information about this facility, which has been three months in the making, see our earlier article about it from September, or SCOR’s press release.

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