NEWS 5


DODEKA IV TARGETS RARE PERIL


Investment manager Twelve Capital has issued a third private catastrophe bond.


Dodeka IV is a $28 million zero-coupon cat bond that expires on December 15, 2014, and covers wind risk in the US for an unnamed sponsor.


Dodeka IV comprises two tranches. The first


covers losses due to wind events in Florida, the second covers losses due to wind events in the US federal states around Gulf of Mexico.


Twelve Capital believes that the second tranche


offers a particularly interesting risk within the cat bond universe, as there are few bonds focusing on the Gulf of Mexico states.


The trigger of the transaction is based


on predefined levels of market losses being exceeded. “We anticipate a sound pipeline of private catastrophe bonds, as there are plenty of insurance-risk opportunities that can be transferred into note


format,” said Roman Muraviev, director at Twelve Capital.


According to Twelve Capital, this type of risk has so far been covered by industry loss warranty (ILW) transactions in bond format believes that


only. the transformation method itself


Dodeka IV is one of the few bonds focusing on Gulf of Mexico wind exposure


can support various risk and trigger types that would assist Twelve Capital to broaden its liquid investment offering.


“Now that the platform has become more


established, in future issuances we will consider converting more


complex risks, including It


indemnity triggered covers, to Dodeka format, in order to continue to provide investors with access to the best quality peak and select diversifying risks,” added John Butler, partner and head of sourcing. n


TWIA PARTNERS WITH HANNOVER RE


The Texas Windstorm Insurance Association (TWIA) has launched a three-year catastrophe bond in conjunction with Hannover Re.


The bond, issued at $300 million, will cover


three years of reinsurance protection on an annual aggregate basis using an indemnity trigger.


Issued via Bermuda–based special purpose


insurer Alamo Re, the bond will offer a single tranche of notes to collateralise the retrocessional


agreement with Hannover Re and ultimately the reinsurance agreement with TWIA.


The bond will cover Texas named storms,


covering TWIA for losses from hurricanes and tropical storms. It will trigger when the ultimate net loss to TWIA is $50 million or above, allowing the insurer to keep its aggregate from being eroded by small storms. n


ARMOR RE HITS THE TOP SPOT


American Coastal Insurance issued its second catastrophe bond, Armor Re (Series 2014-1), in May.


The $200 million bond protects against named storms across three US hurricane seasons and uses an indemnity trigger on a per-occurrence basis. In the first instance, the bond will focus on Florida named storms, but also offers an option to extend the coverage to additional US states if it is reset.


The deal was launched with a single tranche


of notes and sized at $150 million, but it was upsized to $200 million.


ALLSTATE WADES IN WITH TWO BONDS


Allstate, the US primary insurer, returned to the market with two transactions in May.


The first, Sanders Re (2014-1), was a $750 million catastrophe bond that


covers US


named storms with the exclusion of Florida and California, New York and Washington earthquake.


The second, Sanders Re Insurance (2014-2) came


to market in the form of $200 million of indemnity protection for Allstate subsidiaries Castle Key


and Castle Key


Indemnity. This transaction will provide coverage against named storms, earthquakes and severe thunderstorms in Florida.


Sanders Re (2014-2) is based on an indemnity


trigger, which is a first for Allstate, and has been issued on a per-occurrence basis over a three-year term.


SOMPO LAUNCHES TYPHOON BOND


Aozora Re, the latest catastrophe bond from Japanese


insurance group Sompo Japan


Nipponkoa (SJNK), was worth ¥10.125 billion ($99.35 million).


The Japanese typhoon bond, which provides The three-year bond was issued at $300 million


SJNK with three years of fully collateralised reinsurance


protection, is based on an indemnity and per-occurrence basis. www.intelligentinsurer.com INTELLIGENT ILS JUNE 2014


RAINER LESNIEWSKI / SHUTTERSTOCK.COM


GUIDO AMREIN, SWITZERLAND / SHUTTERSTOCK.COM


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