Generali has issued the first European multi-peril catastrophe bond

Generali returns to the ILS market with an EUR 200 million cat bond on floods and windstorms in Europe and earthquakes in Italy. The transaction is the first ever European multi-peril indemnity triggered Rule 144A catastrophe bond, the company has announced.

Assicurazioni Generali S.p.A has entered into a reinsurance agreement with Lion II Re DAC, an Irish special purpose company, providing per occurrence cover in respect of the Generali Group losses from Italian earthquakes, European windstorms and floods over a four year period. The Lion II Re transaction transfers part of these risk to the bond investors allowing for a more optimized protection for the Group against catastrophes.

Lion II Re DAC has issued a single tranche of notes in an amount of EUR 200 million in order to fund its obligations under the reinsurance agreement. The transaction is the first indemnity trigger Rule 144A catastrophe bond to cover multiple European perils and the first to provide protection for European flood risk. The notes have been placed with capital markets investors in a Rule 144A offering.

The Group Chief Insurance Officer of Generali, Valter Trevisani stated: "This new product confirms the Group's strategy started in 2014 with Lion I Re aimed at transferring part of the risk to the capital market through innovative bonds. This latest product has proved to be equally attractive to potential investors as our previous issues. It allows us to further optimize the purchase of reinsurance protection maintaining a good degree of flexibility and mitigating the counterparty risks by expanding the providers' panel".

The Group Chief Financial Officer of Generali, Luigi Lubelli stated: "For Generali, this is the third ILS bond over the last 3 years, and the success achieved so far confirms it reached a well-established presence in the ILS market. This tool, and more generally the alternative techniques to transfer risks, represents the innovative and flexible approach with which the Group intends to implement its capital strategy".

The demand from capital market investors has allowed the protection provided to Generali a premium of 3% per annum on the EUR 200 million cover under the reinsurance agreement, which Lion II Re DAC will in turn pay to investors as interest on the notes. According to the terms of the offering all of a portion of the interest amount and the principal payable in respect of the notes will be reduced in case of losses at the charge of Generali Group due to Italian earthquakes, European windstorms or European floods which will exceed a predefined threshold for each peril.

The Lion II transaction follows the issuance in 2014 of Generali's first catastrophe bond, Lion I, providing cover in respect of Europe windstorms only and the issuance in 2016 of the Horse Capital I bond providing Generali with cover in respect of increases in the loss ratio of its motor third party liability business. The cover provided to Generali under Lion II is fully collateralized by highly rated assets through the whole risk period. The Group will continue to monitor closely this market, and intend to play a major role in this market availing itself of ILS tools in its capital management strategy and risk transfer.

Related articles

TALANX reconfirmed its FY2018 outlook for the Group's net income

Hannover-based TALANX Group announced its Q1 GWP was up to EUR 10.6 billion, 8.3% up y-o-y, while the Group net income dropped by 8.4%, to EUR 218 million "mainly as a result of the one-off effect of the US tax reform as well as the higher share of profits attributable to minorities".

2018-05-17

ALLIANZ 1Q results are on track to meet FY 2018 targets

German insurance group ALLIANZ announced its 1Q 2018 operating profit was down 6.0% to EUR 2.8 billion. "The main drivers for the decrease were EUR 142 million currency translations and EUR 148 million benefit in the prior year related to our corporate pension administration".

2018-05-17

CROATIA Osiguranje, 1Q2018: net profit up by 50% y-o-y

Adris group's insurance arm, CROATIA Osiguranje, posted a net profit of HRK 101.5 million (~EUR 13.7 million) in 1Q2018, up 50% y-o-y. Its consolidated GWP went up by 7% y-o-y, to HRK 1.10 billion (~EUR 148.6 million).

2018-05-10

SWISS Re reports Q1: GWP up by 13.1%

SWISS Re announced Q1 result heavily impacted by changes in US GAAP accounting due to which the group's net income fell from USD 656 million to USD 457 million.

2018-05-10

ZURICH Q1 result: GWP in P&C rose 5%

ZURICH 1Q2018 results show the development of all business lines. P&C GWP rose by 5% in USD terms. Overall the Group saw rate increases of around 2%, said the insurer's official statement.

2018-05-10

MUNICH Re Q1 profit jumped by 48% y-o-y

1Q2018 results of MUNICH Re show an achieved profit of EUR 827 million, more than 48% higher y-o-y (vs EUR 557 million) thanks to lower expenses and strong underwriting performance.

2018-05-10

Aon's net profit doubled during Q1

Aon Group reported Q1 2018 net profit of USD 610 million, compared with USD 305 million a year before, according to a statement published on the company's website.

2018-05-10

ON THE MOVE

TOP EVENT

FIAR 2018 - Motor Insurance Conference (I & II): with the right use of technoloogy, clients' expectations and MTPL insurer's profitability may go hand in hand

The first and second parts of the Motor Insurance Conference taking place at FIAR 2018 focused on the new MTPL Law in Romania and the way it changed the market after almost 1 year of implementation, as well as the consequences of the new legislative framework and the operational challenges this brings, but also the most suitable solutions for balancing regulation, insurers' appetites and customer expectations on the MTPL market.

16.05.2018

FIAR 2018: Brokers' Conference (II): digitization and technology are needed for efficient operations, but will not replace the human touch in consultancy

The second part of the Brokers' Conference taking place at FIAR 2018 analyzed the impact of European Union's legislative overhaul - IDD & GDPR -, also bringing into debate study cases and real-life scenarios of what the brokers face on the market, and, last but not least, trying to see whether digitization and InsurTech could truly lead to disintermediation.


15.05.2018

Brokers' Conference (I): Until 1 July, when we will see the final version of the IDD, we cannot say for certain if we are ready and how ready we actually are

The second day of debates at FIAR 2018 started with The Brokers' Conference, the event dedicated to the mediation market in Romania and in the CEE region. The first part of the conference focused on a market overview and also analyzed the challenges of the IDD implementation, as well as the potential impact of IPID for MTPL and PAD.

15.05.2018

INSURANCE IN A DIGITAL WORLD Conference: capacity, consistency and culture are the three key success factors in the digital transformation of insurers

The INSURANCE IN A DIGITAL WORLD Conference, taking place at FIAR 2018, brought into debate the impact of digitization on the insurance industry. The first part of the conference focused on risks & opportunities of digitalization for both industry and consumers, as well as case studies and best practices: BigData & IoT, BlockChain, Peer-to-Peer, and AI.

14.05.2018

Insurance Market Trends Conference (II): GDPR and IDD, European regulations affecting all business lines, as well as the compliance with the Solvency II framework, are the main challenges ahead for the Romanian market

During the second part of the Insurance Market Trends Conference, taking place at FIAR 2018, the debates focused on the current situation in Romania and the sustainable development for a growing and stable insurance market, as well as the challenges and opportunities for the local insurers.


14.05.2018

See all