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Hannover Rueck SE
Capital/Financing Update • Oct 17, 2018
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Capital/Financing Update
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Corporate | 17 October 2018 13:00
Hannover Rück SE: Hannover Re’s fifth catastrophe bond transaction raises total issuance for clients to USD 1.5 billion in 2018
DGAP-News: Hannover Rück SE / Key word(s): Bond
17.10.2018 / 13:00
The issuer is solely responsible for the content of this announcement.
Press Release
Hannover Re’s fifth catastrophe bond transaction raises total issuance for clients to USD 1.5 billion in 2018
- ILS market expected to reach record volume this year
- Growth of collateralised reinsurance set to continue
Hannover, 17 October 2018: Hannover Re has completed the fifth catastrophe bond transaction for clients this year, raising the total issuance volume to USD 1.5 billion in 2018.
“This year, we have once again provided protection for our clients against a multitude of risks,” said Henning Ludolphs, managing director retrocession and capital markets at Hannover Re. “The variety of cedants and risks as well as the record number of issuances underscores our ability to close insurance-linked securities transactions successfully.”
The company’s biggest transaction this year was a USD 500 million cat bond providing protection for the Federal Emergency Management Agency (FEMA) for floods in the 50 US states, the District of Columbia, Puerto Rico and the US Virgin Islands that result directly or indirectly from a named storm. The transaction marked the first time FEMA transferred risks through a cat bond to investors.
Hannover Re’s latest transaction was a USD 125 million cat bond covering San Diego-based energy infrastructure company Sempra Energy against third-party liability from wildfires.
Earlier this year, Hannover Re completed three further transactions for existing clients. It helped cover Texas Windstorm Insurance Association against named storms and severe thunderstorms through a USD 400 million cat bond and American Integrity Insurance Company of Florida, Inc. against named storms and severe thunderstorms through a USD 79 million cat bond. In addition, Hannover Re has transformed USD 400 million of California and Pacific Northwest earthquake risk for Oak Tree Assurance, Ltd.
GC Securities, a division of MMC Securities LLC, served as the sole structurer and sole bookrunner for all transactions with the exception of the FEMA cat bond. In this case GC Securities was the sole structurer and acted as joint bookrunner together with Aon Securities.
“With this year’s issuances, we have been able to maintain existing partnerships and attract new clients,” said Jürgen Gräber, Hannover Re’s executive board member responsible for coordination of property and casualty reinsurance and insurance-linked securities. “Through our activities in the insurance-linked securities market, we are able to generate margins that are both low-risk and attractive.”
ILS market volume to reach record USD 100 billion in 2018
By the end of this year Hannover Re expects the market for insurance-linked securities (ILS) to reach a total volume of close to USD 100 billion. As much as two thirds of that amount will come from collateralised reinsurance, which consists of private contracts between cedants and investors that are backed by collateral held in trust. Reinsurers such as Hannover Re front some of these transactions.
“Collateralised reinsurance will continue to grow strongly,” Henning Ludolphs said. “For investor and cedants, collateralised reinsurance is attractive because of its broader range of risks and simpler structure. Collateralised reinsurance has become a success story in itself and we remain strongly committed to it.”
Hannover Re has established itself as one of the top three fronting companies in the collateralised reinsurance market over recent years. It placed the world’s first risk securitisation in 1994 through its KOVER transaction, making it the longest-serving partner in the transfer of insurance risks to capital markets.
Hannover Re, with gross premium of EUR 17.8 billion, is the fourth-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with around 3,300 staff. Established in 1966, the Hannover Re Group today has a network of more than 140 subsidiaries, branches and representative offices worldwide. The Group’s German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor’s AA- “Very Strong” and A.M. Best A+ “Superior”.
Please note the disclaimer:
https://www.hannover-re.com/535917
Contact
Corporate Communications:
Karl Steinle
tel. +49 511 5604-1500
Media Relations:
Oliver Suess
tel. +49 511 5604-1502
Investor Relations:
Julia Hartmann
tel. +49 511 5604-1529
17.10.2018 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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| Language: | English |
| Company: | Hannover Rück SE |
| Karl-Wiechert-Allee 50 | |
| 30625 Hannover | |
| Germany | |
| Phone: | +49-(0)511-5604-1500 |
| Fax: | +49-(0)511-5604-1648 |
| Internet: | www.hannover-re.com |
| ISIN: | DE0008402215 |
| WKN: | 840 221 |
| Indices: | MDAX |
| Listed: | Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange |
| End of News | DGAP News Service |