SCOR issues extreme mortality protection bond
SCOR Global Life SE, a subsidiary of SCOR SE, has completed a deal that provides it with collateralised extreme mortality protection against increases in US mortality rates from any cause.
Atlas IX Capital Limited was structured to provide index-based coverage to SCOR Global Life based upon mortality rates reported by the US Centers for Disease Control and Prevention. The transaction marks the first time SCOR has accessed the capital markets for protection for its life reinsurance portfolio and follows a strong track record of Atlas series catastrophe bonds on the non-life side.
Aon Benfield Securities, the sole structuring agent and a joint bookrunner, completed the offering of $180m of principal at-risk variable rate notes exposed to extreme mortality events for Atlas IX Capital Limited.
Gilles Meyer, chief executive of SCOR Global Life, said: “The Series 2013-1 note offering of Atlas IX has created tremendous interest, enabling SCOR Global Life to secure substantial protection against its increased pandemic exposure following the strong growth of its portfolio, with the acquisition of Generali US being the latest example. In combination with the innovation of an exceptionally low attachment point, the secured protection provided by Atlas IX represents a very cost efficient risk mitigation tool.”
Paul Schultz, chief executive of Aon Benfield Securities, said: “The offering of Atlas IX was very well received by investors, who appreciated the addition of a new sponsor to the extreme mortality bond market. The transaction was well received by the market and allowed SCOR to obtain meaningful coverage on very attractive terms.”
The notes were issued by Atlas IX Capital Limited, an Irish private limited company, which was established for this transaction. Risk Management Solutions provided the risk modelling and analysis.
