Amlin Sells $150M In Cat Bonds
Amlin, the biggest insurer in the Lloyd’s of London market, said it has sold $150 million of catastrophe bonds through a Bermuda subsidiary to protect itself against potential losses from US earthquakes and hurricanes and European storms.
The bond issue, carried out through Bermuda-based vehicle Tramline Re, is double the $75 million of cover Amlin originally sought during the marketing stage.
“The protection afforded under this bond will complement our traditional reinsurance programme and protect the group from frequency of major catastrophe losses,’ Amlin Chief Executive Charles Philipps said in a statement.
The Reuter news service says the bond sale marks the first time Amlin has turned to the catastrophe bond market.
Catastrophe bonds were developed in the 1990s to help insurers and reinsurers manage their exposure to natural disasters by transferring some of the risk to capital market investors.
Buyers of catastrophe bonds receive interest payments that are largely insulated from wider macroeconomic or financial market developments, but risk losing all or some of their money if a natural disaster occurs.
