Willis Re closes first indemnity extreme mortality $100m cat bond ‘La Vie Re’

Willis Re Securities in collaboration with Willis Re, the reinsurance division of Willis Towers Watson, has structured and placed $100 million of insurance-linked securities (ILS) for life mutual insurance group Securian Financial.

The catastrophe bond, called La Vie Re, provides Minnesota Life, a life insurance subsidiary of Securian Financial Group, with a single $100 million tranche of fully collateralised protection against a deterioration of the performance of its group life business over a three-year period. The structure features an indemnity trigger on an annual loss ratio basis.

La Vie Re, which closed October 23, is the first underwritten Rule 144A cat bond exposed to extreme mortality risk on an indemnity basis.

Willis Re said despite the uncertain environment of COVID-19, investors recognised the high quality cedant, its marginal risk and robust structure. The transaction is priced with an annual risk spread of 2.85 percent.

“We are proud to have supported Securian in its inaugural catastrophe bond transaction,” said Quentin Perrot, senior vice president of Willis Re Securities. “Thanks to the robust structure that an underwritten Rule 144A cat bond offers, investors have supported this first indemnity extreme mortality bond. This speaks to the increased openness of the ILS market to not only broaden the scope of assumed risks, but also recognises the strength of the Minnesota Life portfolio.”

Jim Fallon, executive vice president of Willis Re, added: “The La Vie Re cat bond will allow Securian Financial a long term and more sustainable access to the broader capital market investors. It demonstrates Securian Financial’s strategic utilisation of all the available sources of reinsurance capital. Our team’s deep technical knowledge of Life, Accident and Health risk, ability to collaborate with our client and determination to find optimal solutions, were instrumental in successfully navigating the challenges of the present market environment. We are delighted to strengthen our relationship with Securian Financial through the issuance of this catastrophe bond.”