Swiss Re Insurance-Linked Fund Management

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Secquaero wins ILS transaction of the year award for SQ ReVita life securitization


Swiss based boutique finance and investment house Secquaero Advisors Ltd. has won an award for their successful securitization of  a €60m closed block of existing in-force unit-linked life insurance policies. The SQ ReVita transaction was completed in June this year and was seen as an innovative and secure transaction by investors and so received a lot of attention. The SQ ReVita transaction was named ILS Transaction of the Year at the Worldwide Reinsurance Awards in London recently.

Dirk Lohmann, Chairman of Secquaero Advisors Ltd., said; “We are honoured by the recognition awarded to Secquaero and its staff for this innovative transaction. The continued growth and success of insurance-linked securities as a viable alternative asset class depends upon the development of new products for investors and new solutions for potential sponsors. Secquaero was established with the objective of helping to expand the potential for collaboration between the insurance and capital markets.”

He continued; “Our thanks go to the sponsor, ATLANTICLUX Lebensversicherung S.A. for placing its trust in Secquaero, to Jas Thind at Novium AG for the collaboration in building the syndicate as well as well as to our co-investors who were critical in ensuring a successful placement.”

SQ ReVita I Ltd was the first syndicated securitization of value of in-force to be placed with capital market investors since the outbreak of the financial crisis in 2008. That is a big deal as there was a lot of nervousness regarding life securitization, particularly value-in-force after the financial crisis. A total of €60m was raised on behalf of the ultimate sponsor, ATLANTICLUX Lebensversicherung S.A., Luxembourg, an affiliate of the Munich based FWU Group.

SQ ReVita I Ltd is particularly attractive to investors because of its net return (IRR) of 10% on a euro denominated asset, its relatively short duration of four years and its expected maturity of ten years as well as its self-amortizing structure with monthly repayments of both principal and interest. The uncorrelated nature of the underlying risks makes these assets particularly attractive to investors in the ILS space looking to diversify outside of catastrophe bonds.

The securitization was structured by Secquaero Advisors and they will act as transaction manager until the transaction matures. In addition, Secquaero participated in the investment of the transaction through their own Secquaero ILS Fund. The notes were privately placed with institutional investors, such as pension funds, pension insurers and ILS specialist investment funds and syndication was managed in collaboration with Novium AG.

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