DAILY NEWS Jan 9, 2013 1:51 PM - 0 comments

AIG obtains $400 million in reinsurance coverage for U.S. hurricanes and earthquakes

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Insurance giant AIG announced Wednesday that it has entered into a reinsurance deal with Compass Re Ltd., which will provide $400 million of peak-zone protection against U.S. hurricanes and earthquakes.

Bermuda-based Compass Re has issued a $400 million catastrophe bond in a single tranche for the deal. 

The transaction closed on Dec.  27 and provides AIG with fully collateralized coverage against hurricane and earthquake losses on a per-occurrence basis (under a reinsurance agreement related to the notes) through December 2014 using an index trigger with state-specific payment factors.

AIG has to now sponsored $1.85 billion in catastrophe bonds over the past three years.

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