Windstorm insurance in four US states
In 2018, Swiss Re Capital Markets structured and placed the issuance of USD 350 million of insurance-linked securities by Frontline Re Ltd on behalf of Frontline Insurance (www.frontlineinsurance.com). The transaction is Frontline’s debut catastrophe bond and covers windstorms in Alabama, Florida, North Carolina and South Carolina for a period of four years.
It represents the largest cat bond of a Florida-based insurance company (that is, a non-government entity) to date. The innovative transaction uses an indemnity trigger, featuring an event-adjusted attachment level. For the first time in the cat bond market, this determines payments by ranking the size of events that occur during an annual risk period.
Swiss Re Capital Markets acted as the sole structuring agent and bookrunner for the transaction, which was well received by investors.