The Hartford Financial Services Group has purchased $247.5 million in multi-year, collateralized reinsurance from Foundation Re II Ltd., a special purpose reinsurance company – commonly known as a “sidecar” – incorporated in the Cayman Islands.
“Foundation Re II financed the reinsurance through the issuance of risk-linked securities to the capital markets,” said the bulletin. Hartford concluded a similar $180 million alternative risk transfer placement with Foundation Re [I] two years ago (See IJ Website Nov. 18, 2004). This current deal essentially renews that coverage.
Hartford said: “The new reinsurance coverage is designed to complement The Hartford’s existing reinsurance and state-specific insurance programs and to enhance its ability to manage risk related to large natural catastrophe losses. The reinsurance is composed of two separate coverages. The first coverage provides $180 million of reinsurance for losses from individual hurricane events along the Gulf and Eastern Coasts of the United States. The second coverage provides $67.5 million of annual aggregate reinsurance for losses resulting from certain earthquake, hurricane, tornado and hailstorm events within the continental United States.
“Goldman, Sachs & Co. acted as sole bookrunner and lead manager for the transaction, and BNP Paribas served as co-manager. Risk Management Solutions provided the modeling services in support of the transaction and will serve as the calculation agent for Foundation Re II.”
Was this article valuable?
Here are more articles you may enjoy.