SCOR sponsors new cat bond for US, Canada perils

SCOR sponsors new cat bond for US, Canada perils | Insurance Business New Zealand

Reinsurance

SCOR sponsors new cat bond for US, Canada perils

Multi-Byear risk transfer capacity effective until 2027

Reinsurance

By
Kenneth Araullo

SCOR SE has sponsored a $175 million catastrophe bond to provide protection against named storms and earthquake risk in the United States and Canada.

The Atlas Capital DAC Series 2024-1 offers the reinsurer multiyear risk transfer capacity of $175 million from June 1, 2024, to May 31, 2027, according to a statement from SCOR.

The catastrophe bond received strong investor demand, SCOR noted in a report from AM Best.

“SCOR is pleased to sponsor a new cat bond this year, securing multi-year protection against peak natural perils from the (insurance-linked securities) market,” chief financial officer François de Varenne said.

He added that cat bonds are a key component of SCOR’s capital protection strategy under the Forward 2026 strategic plan.

SCOR also noted that it achieved efficiency gains by reusing Atlas Capital DAC for a second year.

Atlas Capital DAC Series 2024-1 is an aggregate index-based trigger cat bond issued by Atlas Capital DAC, a multi-arrangement special-purpose vehicle created in 2023 for the Series 2023-1 cat bond issuance. It may be used to sponsor cat bonds covering various perils in both life/health and property/casualty sectors.

The size of the Series 2024-1 issuance aligns with SCOR’s catastrophe exposures and its retrocession strategy under the Forward 2026 strategic plan. This plan identifies risk partnerships, including capital market solutions like cat bonds, as key levers for value creation.

Meanwhile, the global re/insurer announced that it is reducing its exposure to climate-related risks and US casualty due to pricing not keeping up with exposure.

SCOR is also building buffers into its reserving for both short- and long-tail lines, according to de Varenne. This includes a conservative €62 million ($67.4 million) net reserve for the Baltimore bridge disaster.

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