Covéa has taken out reinsurance protection of €120 million euros with the Irish company Hexagon II Reinsurance DAC, known as “Hexagon II Re”.
In order to achieve this, Hexagon II Re issued a tranche of catastrophe bonds that mature in January 2024, under Rule 144A of the US Securities Act. This issue is intended to cover the French non-life insurance companies within the Covéa group against the risk of storms and other weather events, in particular those affecting metropolitan France from 1 January 2020 onwards.
The cover, which is fully collateralised, works on a per event basis, which means that the cover is triggered when the cost to Covéa of a weather event covered by the cat bond exceeds a specific threshold.
With Hexagon II Re, Covéa strengthens its presence in the catastrophe bond market outside the US.
“The Hexagon II Re issue enables us to continue diversifying our reinsurance capacity and consolidate our access to global capital markets within a secure legal and financial framework. We are delighted with the reception this new issue has received among investors, which demonstrates the importance of our commitment to the markets and enables us to benefit from a multi-year cover that is fully collateralised and contributes to the financial protection of the group,” said Pierre Michel, Managing Director for Reinsurance and International Operations at Covéa.
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