SCOR sponsors new Cat bond that provides capacity for named storms in U.S., U.S./Canada quake

SCOR has successfully sponsored a new catastrophe bond – the risk period for which runs from Feb. 11, 2015 to Dec. 31, 2018 – that will provide the group with multi-year risk transfer capacity of US$150 million for named storms in the United States, as well as U.S. and Canada earthquake events.

Atlas IX Series 2015-1 replaces the U.S. tranches of Atlas VI Series 2011-1, which matured on Jan. 8, 2015, notes a company statement Thursday.

Bond issuer Atlas IX Capital Limited is an Irish private limited company. In connection with placement of the bond, SCOR Global P&C will enter into a risk transfer contract with the issuer, the company statement adds.

The bond – priced on Feb. 5 and is expected to close Feb. 10 – had Aon Benfield Securities Inc. acting as sole structuring agent and sole bookrunner for the deal. The first issuance from the Atlas IX vehicle, Series 2013-1, protects SCOR’s extreme mortality exposures in the U.S., the statement notes.

The move to sponsor the new bond reflects SCOR’s policy of diversifying its capital protection tools. “The successful placement of this new cat bond, building upon a series of capital market transactions, is fully in line with SCOR’s strategic initiative to optimize its retrocession structure to accompany the Group’s cat capacity growth,” says Victor Peignet, CEO of SCOR Global P&C.

Related – Alternative insurance capital capacity reaches $62 billion: Aon Benfield

“With a protection for U.S. named storm and U.S. and Canada earthquake events on an aggregate basis, this transaction enables SCOR to complement its retrocession program, minimizing counterparty credit exposure and diversifying counterparty risk,” Peignet continues.

#SCOR successfully sponsors a new catastrophe bond, Atlas IX Series 2015-1 http://t.co/DB3tNf6Adb #Reinsurance

— SCOR SE (@SCOR_SE) February 5, 2015

The loss payments covered by the cat bond are based on market share factors applied to market insured losses, as reported by PCS (Property Claim Services), on an annual aggregate basis.

The company reports that the protection of its capital constitutes a strategic axis for SCOR and capital market solutions have been regularly used for it, with 15 transactions completed to date, including cat bond, mortality bonds and contingent capital.