NEWS 3


(continued from previous page) to be welcoming him to our growing team.”


Before his time at Guy Carpenter, Flandro


was part of the Benfield Research team and is a regular presenter at industry events and commentator in industry publications.


Flandro said: “While there has been continued consolidation in the reinsurance brokers market for a number of years, the creation of JLT Towers Re offers the industry a real alternative and for me a very exciting prospect. I see this as an excellent opportunity to build on my experience and expertise working with the some of the industry’s leading talent as part of a new and formidable platform.”


Alastair Speare-Cole, co-chief executive officer


at JLT Towers Re, said: “Following successful renewals at 1/1 and 4/1 we appreciate the continued support from clients and markets as we build our capabilities and grow the JLT Towers Re platform. David is a really great hire for the business and testament to our focus on client needs and ongoing success.”


JLT Towers Re also recently hired Bart Zanelli,


formerly of Guy Carpenter GC Securities, as head of advisory North America.


Zanelli spent several years with Guy Carpenter,


where he was managing director of corporate finance and advisory. His role included executing


and closing transactions relating to financing, M&A, and securitisations of insurance funding assets.


He has been tasked with developing the North


American business by assisting clients and prospects with investment banking services, such as raising capital, M&A, and the evaluation of strategic alternatives.


Zanelli said: “Joining JLT Towers Re is an


exciting next step in my career. I believe that I have acquired a number of key skills during my time at Guy Carpenter and Fox-Pitt, Kelton, and I am eager to further develop these with the great opportunities that JLT Towers Re is seeing in the market.” n


GROUND-BREAKING GENERALI BOND PLEASES INVESTORS AND ISSUER


Generali has said that the success of its recent catastrophe bond exceeded its expectations, both in terms of price and interest, and in the face of a fiercely competitive reinsurance market.


The Italian insurer said it believes demonstrated that


balance sheet and ensure it also investors appreciate


the company’s recent moves to streamline its


long-term


profitability. The bond provides it with more flexibility and diversity of capital, the Italian insurer said.


Lion I Re, an Irish special purpose reinsurance company, provides Generali with €190 million of per occurrence protection in respect of losses stemming from Europe windstorms over a three-year period.


The deal is the first ever Rule 144A capital markets placement


providing protection in


respect of European windstorm risk on an indemnity basis in the market. It is also the first Italian sponsored catastrophe bond.


The notes will be triggered if a windstorm


generates losses to Generali Group at a level higher than €400 million (up to €800 million) in a pre-defined region comprising 16 European countries.


GC Securities was lead structuring agent and bookrunner on the deal. Munich Re was co- structuring agent. Aon Benfield Securities was joint bookrunner


Franco Urlini, head of group reinsurance


and R&D at Generali, said that the insurer was “extremely satisfied with the bond and the


The deal is the first 144A capital markets placement providing protection for European windstorm risk on an indemnity basis


price we achieved. We had a target in mind, but the final result exceeded that”.


“Compared with traditional reinsurance— and considering both the structuring costs and associated credit risk—the bond proved an attractive transaction for the Generali Group.”


Mirko Sartori of Generali’s capital management team said that the bond was well received by the market with the final coupon price


reaching 2.25 percent—“the lowest


achieved spread in the ILS market for risks other than health; and well below the initial pricing guidelines”—while the transaction was upsized from an initial €150 million to €190 million.


Urlini said that the €190 million limit was


constrained only by Generali’s reinsurance appetite, rather than that of investors, with interest in the European windstorm transaction proving fierce.


Helping matters was the bond’s diversifying


nature and its indemnity trigger, which proved attractive to investors and to Generali.


“We wanted to use this form of trigger because


the bond replaces traditional reinsurance in our portfolio, which already uses indemnity as a basis for assuming risk. In this way we were able to avoid the basis risk associated with a change in trigger type,” said Urlini.


The indemnity trigger also worked well with


investors who have grown more comfortable with the trigger, are


said Sartori. “ILS funds increasingly taking on reinsurance


underwriters who understand these kinds of transactions, which are in fact quite close to traditional reinsurance.” This proximity helped to heighten interest in the bond and drive down the price for Generali.


Urlini agreed that indemnity transactions


require more work, but said that Generali was looking to leverage its “high degree of detail on exposure and risk within our portfolio”, a fact that was “very much appreciated by investors and was reflected in the price”.


Urlini said that the transaction represents


around 20 percent of Generali’s reinsurance spend for European windstorm, but


it is


apparent that the group is considering other perils for the convergence space.


“Generali considered Italian quake initially for


the transaction, but traditional pricing remains competitive,” Urlini explained, although he does not discount such a transaction emerging in the medium term. (continued overleaf)


www.intelligentinsurer.com


INTELLIGENT ILS JUNE 2014


FOTOMANUFAKTURZ / SHUTTERSTOCK.COM


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