Tokio Marine & Fire Ins. Co, Japan’s largest p/c insurer, and global giant Swiss Re announced that they “have arranged a USD 450 million cat risk swap to cover losses from three natural perils.”
The swaps, each of which is valued at $150 million, exchanges Japanese earthquake risks for California earthquake risks, Japanese typhoon coverage for Florida hurricane exposure and French windstorms.
The deal, which is renewable annually, is expected “to run for several years.” The goal of both companies was to spread their respective risks. “By swapping segments of Japanese catastrophe event exposure with Florida, France and California cat risks, Tokio Marine and Swiss Re are able to significantly improve the diversification of their risk portfolios by transferring ‘peak risks’ off of their balance sheets,” said the announcement.
The transaction was organized through Tokio Millennium Re Ltd, a Bermuda-based subsidiary of Tokio Marine, which specializes in sophisticated catastrophe exposure modeling.
Topics Catastrophe Japan
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