Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Windmill II Re cat bond “mirrors” traditional reinsurance for Achmea: Willis Re Securities


The recently completed Windmill II Re DAC (2020) catastrophe bond transaction effectively integrates within the property catastrophe reinsurance program of sponsor Achmea, according to the deals structuring agent and bookrunner Willis Re Securities.

windmillNetherlands headquartered primary insurance group Achmea returned to the catastrophe bond market at the beginning of June, to sponsor a new Windmill II Re 2020 transaction as a renewal of its soon to mature cat bond backed reinsurance protection from a 2017 issuance.

Willis Re Securities, the investment banking, capital markets and insurance-linked securities (ILS) unit of reinsurance broker Willis Re, acted as the deals sole structuring agent and bookrunner, continuing a history of bringing European cat bond sponsors to market.

As our readers will know, the transaction was successful for Achmea, with the issuance upsizing by 25% to EUR 100 million and with the coupon pricing reduced by 11% over the course of the deal’s marketing.

In discussing the transaction, Willis Re Securities explained that the fully collateralized reinsurance protection against European windstorm risks it provides Achmea will run across a four-year period.

Importantly for the sponsor, the indemnity trigger and per-occurrence trigger structure was designed with terms “mirroring the traditional reinsurance placement to ensure effective integration within the overall property catastrophe reinsurance program,” the broker unit said.

Quentin Perrot, head of ILS International, Willis Re Securities, explained, “We are proud to have supported Achmea Reinsurance in its inaugural 144A catastrophe bond transaction. For the first time in 2020, a cat bond priced below the initial target range, demonstrating that cedants with a high quality and diversifying risk profile can achieve success in the cat bond market today.”

That’s a key point, as catastrophe bond pricing and spreads have been on the rise this quarter, but the risks on offer have been largely U.S. focused and as a result there is some catching up with losses and traditional reinsurance pricing going on.

The Windmill II Re cat bond is a rare diversifying peril from outside the United States to come to market recently, so the fact it has priced at levels seen as keen demonstrates the ILS fund and investor community still valuing diversification appropriately and bodes well for future issues from European sponsors, or those from other regions of the world where catastrophe losses have been less prevalent lately.

Perrot continued saying, “The dedication of the Achmea Reinsurance team throughout this project played a key role to ensure this great result. With this new issuance, Willis Re Securities maintains its unrivalled leadership position in the structuring and placement of European ILS transactions.”

Maya Popovic-Biereth, regional director, Willis Re EMEA N/E also said, “Windmill II Re was a natural step forward in Achmea Reinsurance’s relationship with the ILS marketplace which has now matured into a partnership with a wide panel of ILS investors.

“The transaction demonstrates the cedant’s strategic utilisation of all the available sources of reinsurance capital and secures a multi-year capacity seamlessly integrated within their catastrophe program. Our collaborative culture, adaptability and resilience at Willis Re, was instrumental in assisting the client to successfully navigate the challenges of the present market environment. We are delighted to have been able to broaden our relationship with Achmea through the issuance of this catastrophe bond.”

Designing coverage to neatly dovetail into reinsurance programs is part of the value structurers and brokers add in the catastrophe bond market, helping sponsors tap into the appetite of capital market investors while ensuring the coverage remains aligned with their broader programs.

You can read all about this Windmill II Re DAC (2020) transaction and every catastrophe bond deal in our extensive Artemis Deal Directory.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.