Munich Re’s Bermuda Cat Bond Coverage
German reinsurer Munich Re AG today [Feb.28] said it has acquired coverage for US hurricane and European windstorm risks with a total volume of $75 million from the Bermuda special purpose insurer Queen Street V Re Ltd., which placed a catastrophe bond for that amount on capital markets.
The catastrophe bond, which matures April 9, 2015, gives Munich Re relief for losses from extreme events with a combined statistical return period of around 50 years.
The bond has received a rating of B+ from Standard & Poor’s, and the risk premium is 8.50% per anum.
Queen Street V, based in Bermuda, has placed the bond globally among international investors mainly comprising investment funds and hedge funds but also insurers and reinsurers.
Munich Re board member Thomas Blunck said the company adheres to its strategy of selectively using catastrophe bonds as a supplementary means of transferring peak risks from its books.
