ZURICH (dpa-AFX) - Swiss Reinsurance Co. Ltd., or Swiss Re, (SSREY.PK) on Monday said it has secured $400 million in natural catastrophe coverage bond program through the newly-formed Mythen Ltd.
The Zurich-based re-insurer sponsored three tranches of notes in the first transaction through Mythen, a new flexible program that allows Swiss Re to cede wind risks in both the United States and Europe to the capital markets. Mythen's innovative structure covers first and second event multi-peril losses.
The Mythen program, named after the location of Swiss Re's Zurich headquarters on Mythenquai, is an addition to Swiss Re's existing catastrophe bond programs. It will replace the Successor X program, through which the company received $2.4 billion in protection against natural catastrophe events between 2006 and 2012.
Mythen is the latest in a series of catastrophe bonds that Swiss Re has issued since 1997. It also demonstrates Swiss Re's commitment to transferring natural catastrophe risk to capital markets.
Martin Bisping, head - non-life risk transformation at Swiss Re, said, 'The transformation of re/insurance risks into an investor-friendly asset class continues to be a cornerstone of our hedging strategy for peak natural catastrophe risks. In order to grant us full flexibility to pursue this approach in the future, and to provide investors with bonds that have innovative and diversifying features, we have created the new Mythen programme as a follow-on to our long-standing Successor program.'
According to Swiss Re's Group Chief Underwriting Officer Matthias Weber, year 2011 was the second most active year ever in terms of insured natural catastrophe losses, highlighting the need for re/insurers to effectively manage their peak exposures and ensure capacity is available.
In late March, Swiss Re had said that 2011 witnessed insured natural catastrophe losses of around $110 billion, while losses from man-made disasters were around $6 billion. Swiss Re's latest sigma study showed that 2011 saw around 64 percent increase in unprecedented economic losses from natural catastrophes and man-made disasters, mainly due to the earthquake in Japan, while insured losses surged 142 percent from 2010.
Total economic losses to society due to disasters that were insured and uninsured reached an estimated $370 billion in 2011, compared to $226 billion in 2010. The earthquake in Japan accounted for 57 percent of economic losses in 2011.
In Zurich, Swiss Re shares are currently trading at 58 Swiss francs, down 0.70 francs or 1.19 percent.
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© 2012 AFX News
