UnipolSai places €45m Atmos Re cat bond structured by Willis Towers Watson
UnipolSai Assicurazioni, one of the biggest insurers in Italy, has placed a €45 million catastrophe bond providing it with protection against perils in Italy including atmospheric phenomena, snow pressure and flood risks (including Vatican City and San Marino Republic).
Atmos Re is a three-year deal uses an indemnity trigger on an annual aggregate basis with an event cap of €24 million and an event deductible of €1 million. This trigger is designed to deliver protection against a series of small and medium sized events falling below the traditional per occurrence property cat reinsurance program.
The insurance-linked security (ILS) is the insurer’s first since its €200 million cat bond Azzurro Re I expired on December 31, 2018. The insurer bought a higher level of catastrophe protection in the January 1 renewals but also indicated it would look to do another cat bond around now.
Atmos Re was structured and placed by Willis Towers Watson Securities, the securities arm of reinsurance broker Willis Re. Munich Re acted as co-manager, while Towers Watson (Bermuda) acted as independent modelling agent.
In conjunction with the Atmos Re placement, Willis Re also placed a €45 million reinsurance layer sitting immediately below the Atmos Re-backed layer. This placement is said to have attracted a diversified panel of traditional reinsurers and the coverage had the same characteristics as the Atmos Re-backed layer, but with a risk period of one year.
The company said that the Atmos programme is designed to maximise the interests of both sets of capacity providers at the risk return level they are most comfortable with and to ensure optimal size and price available to UnipolSai.
According to Willis, Atmos Re brings an innovative earnings protection for non-peak perils in the insurance-linked securities (ILS) market going into 2019.
“The Atmos Re program symbolises the agility of UnipolSai to use all sources of reinsurance capacity available in the market to achieve its reinsurance protections. It brought to the ILS market a pioneering non-peak aggregate earning volatility cover, closer to the original risk and on new perils," said Alkis Tsimaratos, managing director, head of EMEA West/South, Willis Re.
"In particular Atmos Re was adjusted to fit the current appetite of both traditional reinsurers and capital market investors," Tsimaratos added. "This further demonstrates how both markets can collaborate, leveraging on our embedded ILS capabilities within Willis Re, for the benefit of both UnipolSai and its business partners.”
Marc Guy Victor Sordoni, head of reinsurance, UnipolSai, said: “With the Atmos program, UnipolSai will be protected against frequency of retention of non-peak peril natural catastrophic events, reducing the volatility of our financial results. We are pleased to have brought a transaction to the market which optimizes the appetite of capital market investors and traditional reinsurers, and extends the range of perils and structures that ILS investors can offer on our programme.
"This is in line with our long term strategy to build sustainable relationships with this market as an alternative way to access reinsurance capacity. We thank our trusted advisors Willis Re and Munich Re for their dedication and assistance throughout the course of this transaction. The success of Atmos Re could not have been achieved without their help.”
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