Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Swiss Re on the completion of their $180m Vita Capital IV mortality catastrophe bond


Swiss Re have now published a press release on the completion of their latest catastrophe bond transaction so we felt it worth publishing some of their comments on the transaction. The latest Vital Capital IV Ltd. issuance closed earlier this week, as we wrote here, and secured them $180m of cover for mortality events such as pandemics, epidemics, disasters and terrorist attacks affecting specified age and gender distributions in Canada, Germany, the U.K. and the U.S.

They say that this latest takedown under Vita IV bring issuance of mortality risk to the capital markets through the Vita IV programme to nearly $500m since its launch in 2009. It’s a continuation of Swiss Re’s hedging strategy which they say enables them to manage their extreme mortality exposure in a capital efficient manner.

Swiss Re’s Chief Underwriting Officer, Brian Gray, commented: “The Vita programme continues to provide us with very efficient risk protection and capital relief. By including investment grade notes, the latest issuance of Vita IV enables a broader investor base to participate.”

Swiss Re has a history of securitizing its life risks periodically, issuing mortality risks through the Vita series of deals and last year for the first time longevity risks through Kortis Capital. The Vita series of deals has allowed Swiss Re to securitize $2 billion of protection for extreme mortality life insurance risks since its inception.

“We believe the life ILS market is approaching a tipping point which will lead to robust growth, for both issuers and investors,” stated Swiss Re’s Division Head, Life & Health, Alison Mckie.

The insurance-linked securities market for mortality risks, and now longevity risks, has been championed by Swiss Re over the years. The success they’ve had in repeating issues to great demand from investors is sure to encourage other re/insurers holding large portfolios of life risks to try securitization to the capital markets.

Full details on this Vita Capital IV can be found in our catastrophe bond Deal Directory.

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