The Zurich Financial Services Group announced that it has obtained, through its subsidiaries, Zurich American Insurance Company and Zurich Insurance Company Ltd, a 3-year $225 million catastrophe excess of loss reinsurance protection from Lakeside Re II Ltd. to cover the risk of earthquakes in California. The reinsurance transaction replaces the expiring 2006 Lakeside Re Ltd. transaction.
Lakeside II is a special purpose reinsurance company domiciled in the Cayman Islands. Zurich’s agreement provides that it would “receive up to $225 million in payment of losses in the event of one or more California earthquakes during the 3-year period,” the bulletin explained.
Lakeside II, in turn, has issued to the capital markets principal at-risk variable rate notes linked to this risk. The catastrophe bond has a floating coupon consisting of a fixed 7.75 percent plus a variable investment yield received by Lakeside II on the underlying assets. “The offering was oversubscribed,” said Zurich.
Source: Zurich Financial Services – www.zurich.com
Topics California
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