A bond to cover itself against windstorm in mainland France
Covéa has settled a €90 million reinsurance cover from Irish law company Hexagon Reinsurance DAC, or “Hexagon Re”, providing the Group’s French property and casualty insurance companies a cover against windstorm risk in mainland France from 1 January 2018.
This fully collateralised hedge is “aggregate” in nature, meaning that it is triggered when the cumulative cost for Covéa of storms occurring during a given calendar year exceeds set thresholds. To this end, under Rule 144A of the US Securities Act, Hexagon Re issued two classes of catastrophe bonds maturing in January 2022, for an amount of €45 million each and covering different risk levels.
“This is the first time that an issue has been carried out to specifically cover windstorm risks in mainland France on an indemnity and aggregate basis. This issue’s success illustrates Covéa’s capacity for innovation and is a mark of the diversification of our access to global markets within a secure legal and financial framework. This initiative confirms the Group’s strategy on protection through reinsurance.” stated Pierre Michel, Covéa Group’s Chief Reinsurance and International Officer.
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