Munich Re forms new sidecar

German reinsurer Munich Re has formed a new sidecar allowing it to secure coverage for natural catastrophe exposure in its book of reinsurance business.

Eden Re II, a Bermuda-registered special purpose insurer, has issued $290 million of notes to investors.

Munich Re will transfer a share of its book of non-proportional covers for property-cat treaties mainly exposed to natural catastrophe events to Eden Re II.

In case of losses from this sub-portfolio, Munich Re obtains relief from the quota-share coverage with Eden Re II for the risk period that ends on 31 December 2015.

Thomas Blunck, board member of Munich Re, said: “This sidecar transaction provides a basis to create synergies between large institutional investors’ interest in reinsurance risk and our core business of covering the Nat Cat risk of our clients. Both our clients and our capital markets partners are benefiting from our Nat Cat know-how and our competence to write and manage such peak risks.”