Hannover Re Securitizes $106 Million

Hannover Re has increased its underwriting capacity for catastrophe risks through a $106 million capital market securitization, which “boosted the volume of last year’s “K5″ risk securitization to $520 million,” said the announcement. “The transaction was placed with institutional investors in North America, Europe and Japan, including both new and existing investors. The latter primarily used this as an opportunity to reinvest their profits from the previous year. The envisaged term of the transaction is until 31 December 2008.”

Hannover Re also said that in addition to this form of risk transfer to the capital market, it has “extended its traditional protection covers used to protect against peak exposures such as natural catastrophes. In the future, therefore, there will be no need to make use of structured covers.”

“With these latest transactions we have made our portfolio even more weather-proof. We are optimally placed to benefit from the further profitable market opportunities that will open up in worldwide catastrophe business going forward”, CEO Wilhelm Zeller explained.

Describing the transaction, Hannover Re said the “portfolio assembled for the ‘K5’ securitization consists of non-proportional treaties for property catastrophe, aviation and marine (including offshore) reinsurance; altogether, around 42 percent of this business is passed on to the investors.”