RMS partners with Willis Re and Securian on $100m La Vie Re cat bond

Catastrophe risk modelling firm RMS has partnered with Willis Re Securities and Securian Financial to launch the new La Vie Re series 2020-1 mortality cat bond.

The bond provides $100 million of reinsurance protection for Minnesota Life Insurance Company, a Securian Financial affiliate. Covering the US, it is the first indemnity 144A excess mortality bond that models the cedants’ portfolio on a loss ratio basis.

The notes, issued by La Vie Re, were launched to cat bond investors, and the full $100 million principal was achieved with a coupon price of 2.85 percent.

RMS acted as the modeling agent on the cat bond transaction, providing a view of the risk covered by the bond to investors on infectious disease pandemics, terrorism, earthquakes, and other perils.

Jin Shah, client director at RMS, said: “Investors have warmly welcomed Securian Financial as a new sponsor to the ILS market. Likewise, RMS is pleased to support another new issuer secure reinsurance protection from the ILS market with a novel structure and trigger.

"Using our life risk modeling capabilities, RMS developed an indemnity trigger on loss ratios and supported investors’ understanding of the risk, especially on the contribution from the current COVID-19 pandemic. The pandemic outlooks reflect the latest research on vaccine availability, efficacy and distribution, and how this may mitigate the impact of a second, winter wave of COVID-19 infections threatening regions where strict social distancing measures have been relaxed.

"It was a pleasure to collaborate with Securian Financial and Willis Re Securities and it’s great to see the ILS market continue to support innovation in the market.”