Willis places €90m of windstorm ILS for Covea

Willis Towers Watson Securities, the investment banking business of Willis Towers Watson, has structured and placed €90 million of insurance-linked securities (ILS) for French domestic P&C insurance group Covea Mutual Insurance Group.

The transaction was executed in collaboration with Willis Towers Watson’s reinsurance business, Willis Re.

Hexagon Reinsurance DAC, which settled Dec. 15, provides Covea with two €45 million tranches of fully collateralized protection against windstorm risk in France for a four-year period. The structure features an indemnity trigger on an annual aggregate basis with terms mirroring the traditional reinsurance placement, to ensure effective integration within the overall property catastrophe reinsurance programme.

Bill Dubinsky, head of ILS at Willis Towers Watson Securities, said: “Investors were eager to support the transaction. Hexagon diversifies Covea’s sources of reinsurance capacity with competitive pricing.

“This is a unique transaction as it is the first time a European catastrophe bond has supported capacity at the bottom of a traditional reinsurance program, as well as the first time a European indemnity-trigger catastrophe bond was placed on an annual aggregate basis.”

Alkis Tsimaratos, managing director of Willis Re EMEA W/S said: “In addition to opening up a new source of capital for Covea’s reinsurance strategy, Hexagon offers a stable multiyear commitment at attractive terms, in the middle of a challenging renewal market, marked by future price uncertainties. The transaction also demonstrates that attachment levels usually reserved for traditional structures in Europe are equally attracting catastrophe bond investors.”

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