Oakland-based catastrophe modeling firm EQECAT has provided risk modeling services to Electricité Réseau Distribution France S.A. (ERDF) for the issuance of a €150 million [$216 million] catastrophe bond transferring European windstorm risk to the capital markets.
ERDF is the largest European electricity distributor.
EQECAT said its risk model analyzed the “vulnerability of ERDF’s aerial electricity distribution network to the European windstorm peril; validating the risk assessment against the historical performance of the distribution network; and designing a parametric index to efficiently and transparently allow the cession of this risk to the capital markets through the Pylon II catastrophe bond trigger.”
Michel Voronkoff, EQECAT Manager of Europe Modeling noted that the transaction “builds on a history of successful bond issuances using EQECAT’s industry leading European windstorm model, Eurowind™, to assess the risk. It also “leverages the Eurowind™ model’s robust stochastic event set to quantify the risk to the transaction,”He added.
EQECAT also indicated that its European extra-tropical cyclone model is the first to incorporate a “hybrid stochastic event set combining the most suitable aspects of both measured and modeled windstorm characteristics. The EQECAT Eurowind model covers 22 countries, providing the largest geographical area of risk of any commercially available probabilistic European wind model.”
Source: EQECAT
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