SCOR: New Atlas Capital cat bond size in line with reduced cat exposure

France headquartered global reinsurance company SCOR hailed the successful placement of its $75 million Atlas Capital DAC (Series 2023-1) multi-peril retrocession catastrophe bond, while noting that the reduced size, compared to previous cat bonds, is in line with its efforts to reduce its overall catastrophe exposure.

At just $75 million in size, the new Atlas Capital DAC cat bond fell a long way short of replacing SCOR’s maturing $250 million Atlas Capital UK 2019 PLC (Series 2019-1) cat bond deal.

But, the reinsurance firm has been pulling-back and trimming its catastrophe exposures, especially in some parts of the US, which seems to have reduced its need for retro from the cat bond market this year.

However, the reinsurer said of the new cat bond, “SCOR is now in an ideal position to harvest the benefits from an attractive cat reinsurance environment in 2024 and beyond.

“It also confirms SCOR’s commitment to regular cat bond issuances in line with its past strategy.”

SCOR noted that the transaction has now received the approval of the Irish regulatory authorities, where the issuing vehicle is domiciled.

SCOR noted that the new Atlas Capital DAC cat bond vehicle can provide it flexibility in being able to issue both P&C cat bonds and life and health related cat bond deals as well.

In addition, SCOR noted that the cat bond offering integrated ESG related considerations related to its business, in order to support investors’ due diligence.

“Despite a significant market hardening since the end of 2022, Atlas Capital DAC Series 2023-1 was well received and benefited from high investor demand,” SCOR said.

As we’d reported, SCOR’s new cat bond eventually priced roughly 17% below the initial mid-point of spread guidance.

The new Atlas Capital DAC 2023-1 cat bond provides SCOR a three year source of aggregate retrocession on an industry loss index trigger basis, against losses from named storms in the U.S., earthquakes in the U.S. and Canada, as well as European windstorms.

Atlas Capital DAC is, “A multi-arrangement special purpose vehicle approved in Ireland under Solvency II,” SCOR said.

Adding, “This new vehicle may be utilized by the Group to sponsor future cat bonds in order to secure protection against various perils in both L&H and P&C in a more dynamic and cost-effective manner.”

Jean-Paul Conoscente, CEO of SCOR P&C, commented on the new cat bond, “SCOR is pleased to turn once again to the ILS market and secure multi-year protection against peak natural perils. Cat bonds are an integral part of capital protection for SCOR, which has been a regular sponsor for more than two decades.

“The market recognized and supported our commitment to the asset class, and we are delighted with the strong investor demand. A novelty with Atlas 2023 is the establishment of a new type of vehicle which may be used for future cat bonds across both P&C and L&H, and we are grateful to the Irish regulatory bodies for their support and responsiveness during this transaction.”

The company said that maintaining “an efficient capital shield is a strategic cornerstone of the SCOR group,” just one of a range of capital market retrocessional reinsurance solutions the company utilises.

You can read all about this Atlas Capital DAC (Series 2023-1) catastrophe bond from SCOR and every other cat bond transaction in the Artemis Deal Directory.