Swiss Re issues bond to guard against US hurricane damages

SWISS RE yesterday announced that it has completed a pioneering $200m (£125m) bond that provides cover for both North American hurricanes and extreme mortality events in the UK.

This is the first time that storm and mortality cover have been combined into the same issue.

Dual-risk bonds provide greater diversification for investors, with cover provided separately for both eventualities.

The extreme mortality element covers the threat of mass deaths in Britain following a natural disaster or pandemic, such as a deadly flu outbreak.

The notes will run until the end of 2016, giving Swiss Re five years of protection for the life risk and four years for the non-life risk.

Martin Bisping, of Swiss Re said: “The combination of hurricane and mortality risk is a significant innovation. This has provided Swiss Re with an efficient way of bringing risks to the capital markets, in a new combination that we believe is attractive to investors.”