8 January 2014 Alternative Risk Transfer

QBE completes cat bond first

QBE Insurance Group has completed a $250 million cat bond which is the first such deal to cover Australian perils for a primary insurance company on an indemnity basis.

VenTerra Re provides protection against US and Australian earthquakes and Australian cyclones on an indemnity basis for a period of three years.

The deal was underwritten and placed by Aon Benfield Securities, which acted as joint structuring agent and sole bookrunner.

“We are very happy with the coverage and terms secured via VenTerra Re, the first catastrophe bond sponsored by our company and which was received very well among investors,” said Jim Fiore, chief reinsurance officer at QBE.

Paul Schultz, chief executive of Aon Benfield Securities, said: “We are pleased to have successfully placed VenTerra Re on terms attractive to QBE, with coverage substantially similar to what QBE has been able to secure in the traditional reinsurance market.  VenTerra Re was very well received by investors, who welcomed the addition of a new sponsor to the market.”

The notes are rated BB by Standard & Poor’s and Risk Management Solutions provided the risk analysis for the transaction.

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