ILS Deal Supports Insurer’s Windstorm Exposures

Willis Re’s ILS operation, Willis Re Securities has announced that it has structured and placed €120 million of insurance-linked securities (ILS) programme.

The deal will provide reinsurance capacity for Covéa Mutual Insurance Group (Covéa), France’s largest domestic P&C insurance group.

Hexagon II Reinsurance DAC (Hexagon II Re), which settled 5 November, provides Covéa with a single €120 million tranche of fully collateralised protection against windstorm and other weather-related events in France for a four-year period. The structure features an indemnity trigger on a per occurrence basis with terms mirroring the traditional reinsurance placement, to ensure effective integration within the overall property catastrophe reinsurance program.

Quentin Perrot, Head of Sales International at Willis Re Securities, said: “We are proud to have supported Covéa in their latest catastrophe bond transaction. Hexagon II Re is the first non-US cat bond transaction issued in the past nine months. The favourable closing conditions demonstrate investors’ strong appetite for Covéa natural catastrophic risk. With this new issuance, Willis Re Securities maintains its unrivalled leadership position in the structuring and placement of European ILS transactions.”

Alkis Tsimaratos, Managing Director of Willis Re EMEA W/S added: “Hexagon II Re offers a stable multiyear commitment at attractive terms, while integrating seamlessly in the broader reinsurance program of Covéa. The transaction demonstrates the ability of both the traditional reinsurance market and the catastrophe bond market to work together, offering increased reinsurance flexibility to cedants. It also confirms Covéa’s position as an established European ILS issuer and highlights the attractiveness of diversifying European perils to this market.

“Once again, our fully integrated model was key in providing the appropriate advice and execution for our client to achieve its goals. This transaction reaffirms our leading position on ILS issuances across the EMEA region.”