Catlin Invest $225 In Catastrophe Swap

by Stewart Douglas

Story link: Catlin Invest $225 In Catastrophe Swap

Global casualty insurance group Catlin has to announced that its Bermuda arm has purchased around $225 million worth of catastrophy cover in a trade arrangement that will come to fruition should the US experience a series of natural disasters over the coming three years.

The move will see Catlin providing support for over $200 million of cover under the catastrophe exposure swap, which will see it reaching further into the provision side of their business with a view to yielding a return over the coming three years.

Catlin said today that the move will result in affordable cover for up to $87.5 million in protecting against a US earthquake, with $137.5 million in protection of a serious hurricane and resultance damage. The agreement is set for a three year period, which may or may not see claims paid away by the Catlin insurance group.

The coverage increase sees yet further growth at Catlin, off the back of an increase in reinsurance provision for similar catastrophic protection cover, and an earlier three year swap with the Bermuda arm last year which saw the firm hook up with Newton Re Limited through a specific risk transfer arrangement.

Speaking today on the move, Stephen Catlin of the Catlin Group said that the move would prove to be beneficial to the group’s core business over the coming three year period. ““I am pleased to announce that Catlin has participated in another innovative transaction that will provide the Group with protection in the event of a severe earthquake or hurricane striking the United States.”

“This transaction further strengthens Catlin’s ability to withstand claims from natural catastrophes and increases the security that Catlin provides both to its policyholders and its investors. The transaction provides Catlin with fixed-price protection for a three-year period, whilst mitigating the credit and dispute risks that are inherent in conventional reinsurance transactions.”